One of the Indian startups Dunzo, which is a delivery firm backed by Google and operating in eight Indian cities, aims to double the number of funds it has raised so far to extend its reach across the nation and become a $1 billion revenue business in the coming years.
Dunzo Digital Private Ltd is an application that helps users to get low-cost couriers with its rapid delivery of items from parcels to groceries and everything in between even in traffic-clogged towns and cities.
Dunzo, a Bengaluru firm has so far raised $140 million and intends to tap investors for roughly another $150 million this year.
Kabeer Biswas, Dunzo’s Chief Executive Officer (CEO) said in a recent interview- “The expansion only really starts next year at full pace, so we’ll raise the capital this year, but it gets deployed only next year”. And added, the firm may extend to two more cities in 2021, then build toward a presence in 20 urban areas by mid-2023. It’s also started offering 15-minute deliveries for a range of 2,000 commonly-sought-after items.
Dunzo Digital was founded in 2014 and commenced out as a Whatsapp service, and later it became an application where customers typically pay about $6 per order. It is increasingly and consistently tapping into growing Internet usage and better accessibility in India, where tech and consumer-dominated startups or ventures are flourishing with the number of smartphone users, which is nearly 1 billion.
With the advent of technology, covid cases sweeping, and the growing number of smart users, eCommerce has been the quickest growing sector for fast-moving consumer products in recent years. Currently, it accounts for about 5% of all such sales, stated by Jefferies.
Lastly, Biswas said the firm doubled its annual sales in the last year and expects the same rate of germination in 2021. The firm’s biggest operation in Bengaluru is now breaking even, he added. However, we are burning up to $2.5 million a month, though the CEO expects to become profitable in the coming 24 to 30 months. It may also look to expand in other marketplaces in Asia in 2023.
With the last note, he said- “You make 20 cents an order — the only way to make this business works is at scale,” he said. Still, “it’s important to be extremely disciplined in your geographical expansion because you could suddenly start losing money everywhere.”
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