Dunzo, the Bengaluru-based hyperlocal delivery startup, has raised $11 million in total debt capital led by Alteria Capital. The startup said that it would fuel its growth in profitable markets with this debt capital.
It plans to use the fresh capital to work toward becoming a profitable local e-commerce company and scale its operations in already profitable markets.
Dunzo connects merchants, partners, and users to facilitate transactions across courier, commerce, and commute. It is present in eight cities in India, covering Bengaluru, Mumbai, Delhi, Gurugram, Chennai, Hyderabad, Jaipur, and Pune.
Founded in 2015 by Kabeer, Mukund Jha, Dalvir Suri, and Ankur Aggarwal, Dunzo does over two million transactions in a month, and has a retention rate of 80-85 percent. The number of tasks on the platform has shot up by 62 percent, the number of micro markets it serves is up by 8 percent, user base has increased by a whopping 90 percent, and merchants have grown by 19 times.
Profitability has always been the barometer of success and we’re seeing it manifest across several of our micro markets
-Kabeer Biswas CEO, Dunzo
“As markets turn profitable, we are able to fuel our growth with debt while having a significantly higher return on investment for customers and stakeholders” said Kabeer.
The round comes less than five months after it raised US$45 million in a round led by Lightbox, which brought the company’s valuation between US$180 million and US$200 million. The startup is also backed by Google, Blume Ventures, Aspada Investments, STIC Ventures, and 3L Capital.
In 2017, Google has invested $17 million in Dunzo, the search engine’s first direct investment in an Indian startup.
According to Owler.com Dunzo’s has a revenue of $300K and more than 220+ employees. Dunzo’s main competitors are Swiggy , Bigbasket and Grofers.
The hyperlocal market in India is expected to exceed US$323 million in value by 2020, according to a report. The rapid growth of the market is driven by the huge penetration and increased usage of smartphones in India, the change in purchasing behavior of local consumers, and the rise of disposable income and curated products and services.