Massive Transfer: Reliance invests $200 million in Dunzo

By Salman SH

Hyperlocal supply platform Dunzo on Thursday stated it has raised $240 million in its newest spherical of funding led by Reliance Retail Ventures (Reliance Retail) together with participation from present traders Lightbox, Lightrock, 3L Capital and enterprise debt supplier Alteria Capital.

Reliance Retail led the spherical with an funding of $200 million and can maintain a 25.8% stake in Dunzo on a completely diluted foundation.

Dunzo stated the capital might be used to additional its goal to turn out to be the biggest fast commerce enterprise within the nation, enabling immediate supply of necessities from a community of micro warehouses whereas additionally increasing its B2B enterprise vertical to allow logistics for native retailers in Indian cities.

Morgan Stanley acted because the unique monetary adviser and Cyril Amarchand Mangaldas acted as authorized counsel to Dunzo and PwC India supplied monetary due diligence providers. AZB & Companions acted as authorized counsel to RRVL and Deloitte, Haskins & Sells LLP supplied monetary due diligence providers.

The most recent fundraise by Dunzo comes at a time when the start-up ecosystem is being flushed with funds amid a beneficial funding atmosphere. Each home and worldwide traders reportedly poured in over $36 billion in capital into Indian start-ups in CY2021 alone.

The patron web market has largely been an investor favorite with sub-segments like fast commerce (qCommerce), fintech, edtech, and healthtech topping the charts final 12 months when it comes to funding raised from VCs and PEs. The qCommerce section has additionally witnessed heightened investor exercise with start-ups like Zepto, Swiggy, Blinkit (previously Grofers) main the market. The short commerce class in India has an addressable market alternative of greater than $50 billion, in keeping with Dunzo’s personal estimates.

In December 2021, Bengaluru-based Zepto, led by 19-year-old Stanford College dropouts, raised a $100-million Collection C spherical at $570 million in post-money valuation simply months after securing a $60 million fairness financing spherical in November. Meals supply platform Swiggy additionally stated in December final 12 months that it will make investments $700 million into its immediate grocery supply service Instamart.

Grofers additionally fully pivoted into the qCommerce mannequin final 12 months after elevating $100 million kind Zomato in August 2021. In the meantime, India’s largest e-grocery BigBasket can be reportedly creating qCommerce product ‘BBNow’ by means of collaboration with Tata Digital which is able to concentrate on grocery supply inside 18-20 minutes.

Nonetheless, Bengaluru-based Dunzo is likely one of the earliest start-ups to launch into the hyperlocal area again in 2015. The corporate began up initially as an on-demand concierge app that aggregated close by supermarkets and shops — a mannequin which was later emulated by the likes of Swiggy, Grofers, and now Zepto. By late 2019, Dunzo started partially transferring away from the aggregation mannequin and pivoted into its personal inventory-led mannequin utilizing darkish shops.

As a substitute of the standard market (or aggregation) mannequin, which works as aggregator of close by shops and supermarkets, providers reminiscent of Dunzo, Zepto and Instamart work on prime of the stock mannequin utilizing darkish shops. Darkish shops are delivery-only shops that enable start-ups to replenish on their very own stock by means of sourcing tie-ups with wholesalers and types.

Presently, Dunzo is offered throughout seven metro cities in India and the extra capital might be used to increase the fast commerce enterprise to fifteen cities. Dunzo launched its qCommerce supply mannequin ‘Dunzo Each day’ in Bengaluru earlier final 12 months, which is seeing over 20% week on week development. The Dunzo Each day mannequin delivers every day and weekly necessities inside 15-20 minutes, with a concentrate on offering high-quality fruit and veggies.

Along with the funding, Dunzo and Reliance Retail may even enter into sure enterprise partnerships. Dunzo will allow hyperlocal logistics for the retail shops operated by Reliance Retail, additional including to Reliance Retail’s omni-channel capabilities. Dunzo may even facilitate last-mile deliveries for JioMart’s service provider community.

“With this funding from Reliance Retail, we can have a long-term companion with whom we are able to speed up development and redefine how Indians store for his or her every day & weekly necessities. We’re excited by the traction and velocity that Dunzo Each day has achieved and over the following three years, we purpose to ascertain ourselves as one of the vital dependable fast commerce suppliers within the nation,” Kabeer Biswas, CEO and co-founder, Dunzo, stated in a press release.

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