Dunzo co-founder and CEO Kabeer Biswas is set to exit the troubled hyperlocal delivery startup, according to a report in Moneycontrol.
Biswas is exiting the firm after a decade-long stint, marking the end of founder presence at the company, which has been battling severe financial crisis for over 18 months now.
Biswas, would be the last of the founding team to leave, following earlier exits by co-founders Mukund Jha, Dalvir Suri, and Ankur Agarwal. The development comes at a time when the Reliance Retail-backed company has been unable to clear pending salaries, statutory and vendor dues for over a year and a half.
In August last year, Biswas had admitted to his employees that Dunzo had hit a roadblock in securing promised funding, in a letter reviewed by FE. The company had been seeking an investment of around $20 million from Reliance Retail to tide over its cash crunch, while parallel efforts to raise $22-25 million through external investors had also stalled as potential investors remained unconvinced about its revival prospects.
A month prior this, Biswas had written to employees stating that Reliance Retail agreed to infuse funds into the company and claimed that the fresh capital will be deployed to clear the pending salaries and other dues owed to former and current employees as well as vendors. In August, however, he admitted that the company had hit a roadblock, while also urging employees not to take legal action. He stated that such efforts would “just delay the ongoing process”.
The financial crisis had led to all major investors vacating their board positions in the company last year. Neither Reliance Retail, which holds a 25.8% stake, nor Google, with its 20% ownership, currently have board representation. Lightbox who holds a 11.1% stake had also vacated its board position in the company. Co-founders Suri and Jha also departed from their board positions before leaving the company. Biswas holds a 3.39% stake in the company, as of the last funding round. However, it is not clear if he will continue to hold this post his exit.
Industry sources had earlier told FE that investors had refused additional support as Dunzo failed to meet certain service level agreements, including becoming cash flow positive.
The company’s financial performance has remained concerning, with losses jumping to Rs 1,801 crore in FY23 from Rs 464 crore in FY22. Though the company’s FY24 financials are not available, analysts said that losses may have narrowed because of cost-cutting, but revenues would also have declined, so cash flow problem continues.
The startup, which began as a WhatsApp group in 2014, and soon become a verb synonymous with convenient hyperlocal delivery in India, had raised nearly $470 million since inception and achieved a peak valuation of $770 million. However, more recently, it has struggled amid fierce competition from well-funded rivals like Zepto, Blinkit, and Instamart. By September last year, Dunzo was down to just 50 employees, having laid off 75% of its workforce.
Biswas did not respond to a request for comments seeking clarity at the time of going to the press.