Markdown detour slows fresh funds delivery to Dunzo
Dunzo’s valuation is proving to be a roadblock in new financing for the troubled quick commerce startup.
Reliance Retail, the largest investor with 26% stake in Dunzo, is averse to the idea of slashing the valuation of the startup by nearly 50% in a fresh funding deal being stitched together by a set of existing investors, according to people aware of negotiations.
For the telecom-to-retail conglomerate, a steep cut will mean a significant value erosion of its $200-million investment made in Dunzo during a $240-million round in January 2022, they added.
The now cash-strapped startup, which also counts Google as one of its investors, was then valued at close to $800 million.
Dunzo’s frenetic efforts to raise further capital will now depend on all its investors agreeing to a reduced valuation, people cited said.
‘Must Finalise Valuation’
The sharp downturn in the Bengaluru company’s consumer business, from its peak during the Reliance Retail investment last year, has triggered the ongoing decline in Dunzo’s valuation.
“There is a soft commitment of multiples of tens of millions for Dunzo, but for these conversations to close, the valuation needs to be finalised, and with Reliance Retail’s cash, the total pool can be widened, which the firm needs on priority,” said one person aware of discussions.
In recent weeks, Dunzo has reached out to multiple family offices — such as Premji Invest, Kiran Mazumdar-Shaw of Biocon and others — in search of a new consortium of investors.
It has engaged deeply for fresh capital even at a big markdown, as it is racing against time to pay pending salaries and clear vendor dues, multiple people in the know said.
A spokesperson for Premji Invest said it had no comments to offer, while emails sent
