Cash-strapped Dunzo finally close to striking a “transaction” to settle its dues

livemint.com:

BENGALURU : Reliance Retail-backed Dunzo is in the final stages of closing a “transaction" with investors that the cash-strapped startup has been looking to raise for at least a year to clear pending liabilities, including salaries. The arrangement is also expected to “find safety for the company into perpetuity", co-founder and chief executive Kabeer Biswas told employees on Friday in an internal communication, which Mint has seen.

According to a person aware of the developments, Dunzo is in late-stage talks to raise $22 million-$25 million in a mix of equity and debt from a clutch of new and existing investors. Dunzo did not confirm this, but Biswas in his message to employees said the company will be conducting reviews on 3 and 4 May to finalise the transaction, and that it had also negotiated its liabilities to settle for considerably lower amounts.

Dunzo, which is also backed by Google, is in the middle of a liquidity crisis that has over the past year forced it to pivot business models, delay salaries and vendor payments, and reduce its workforce. Biswas, one of the two co-founders remaining at Dunzo, the other being Ankur Aggarwal, told employees the firm has requested investors for a bridge loan to settle salaries on priority.

“We are expecting closure on this by Monday, and all “current" - Mar & Apr salaries to be cleared as soon as that happens," Biswas wrote. He expects pending March and April salaries to be cleared by next week, and other pending liabilities by 20-25 May, subject to closing of the transaction, as per the communication.

The loan towards clearing employee salaries could be as much as $100,000, said the person mentioned above, declining to be identified. Dunzo did not immediately reply to Mint’s