Cash-strapped quick commerce startup Dunzo eyes $20 million more from Reliance Retail

economictimes.indiatimes.com:

Dunzo is seeking at least $20 million (about Rs 165 crore) more from Reliance Retail, its largest shareholder, after the cash-strapped quick commerce startup fell short of its target to raise $75 million by offering convertible notes, people aware of the discussions said. The Bengaluru-based firm could raise just about $45 million in April, as reported first by ET, with only Reliance Retail and Google subscribing to the convertible notes and its other shareholders staying away. This, the people said, has caused an adverse cash flow situation at the company.

Dunzo had deferred payment of June salaries above Rs 75,000, due to what founder and chief executive Kabeer Biswas described as “a cash-flow issue” during a town hall with employees. Reliance Retail owns a 25.8% stake in Dunzo, while Google holds just under 20%. Its shareholding is expected to increase in the startup if the ongoing talks lead to the Mukesh Ambani-led conglomerate making an additional investment.

“They need more cash and have held discussions with Reliance Retail to invest around $20 million. It is not clear if Reliance Retail has given any clear answer to that yet,” said one of the people briefed on the matter. “Dunzo can’t really tap any other strategic investors because of Reliance’s presence as well.” Emails seeking comment sent to Dunzo and Reliance Retail did not elicit any response.