Hyperlocal delivery startup Dunzo wants to raise $150 million in 2021

April 12, 2021: Dunzo Digital, a hyperlocal delivery startup backed by Google and operating in eight Indian cities, seeks to get $150 million in funding and aims to double the amount of capital it has raised so far to extend its reach across the country and become a $1 billion revenue business in the next two years.

“The app, which connects low-cost couriers to thousands of individual merchants, has lured Indians with its rapid delivery of items ranging from groceries to parcels in traffic-clogged cities. The Bengaluru firm has so far raised about $140 million to date and aims to tap investors for roughly another $150 million in 2021,” reports Bloomberg.

Dunzo was founded in 2014 and started out as a WhatsApp service, before becoming an app where customers typically pay about $6 per order.

Also read: Dunzo leads among hyperlocals in e-commerce delivery benchmark Delivery Delight Index

Dunzo CEO Kabeer Biswas wants to raise the capital this year and start the expansion next year at full pace. The company may expand to two more cities in 2021, then build toward a presence in 20 urban areas by mid-2023. It’s also started offering 15-minute deliveries for a range of 2,000 commonly-sought-after items.

Biswas said Dunzo doubled its annual sales in 2020 and expects the same rate of growth this year. Dunzo’s biggest operation in Bengaluru is now breaking even, he said.

However, the company is burning up to $2.5 million a month, though Biswas expects Dunzo to become profitable in 24 to 30 months. It may also look to expand in other markets in Asia in 2023, he said.

“You make 20 cents an order -- the only way to make this business work is at scale,” he said. Still, “it’s important to be extremely disciplined in your geographical expansion because you could suddenly start losing money everywhere.”