Bengaluru-based hyperlocal services provider Dunzo has raised $11 Mn in a debt funding round from Alteria Capital. With this funding round, Dunzo is looking to scale up its operations in profitable locations.CEO and cofounder of Dunzo Kabeer Biswas said that the debt funding will help the company to feed the growth in these cities while having a significantly higher return on investment.
“Profitability has always been the barometer of success and we’re seeing it manifest across several of our micro-markets. As we deploy this playbook into other cities, we’re extremely conscious of what our consumers want,” said Kabeer Biswas.
He further added, “In this journey, 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.”
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, the user base has increased by a whopping 90 percent, and merchants have grown by 19x.
Vinod Murali, Managing Partner, Alteria Capital said, “Kabeer and the team at Dunzo have ensured that the benchmark for hyperlocal services has been raised significantly. Customer love for Dunzo is extremely high evidenced through the growth and frequency of repeat users. While this segment is quite competitive, Dunzo is equipped to be a market leader in the medium term and we are very happy to double down on a high performing company in our portfolio.”
The funding comes at a time when Dunzo is facing increasing competition from Swiggy’s recently launched concierge service which is now operational in Gurugram and Bengaluru. It had earlier reported that both Swiggy and Dunzo have both tied up with wholesalers that run dark stores to do hyperlocal deliveries.
Dunzo which also operates bike-taxis, competes with a whole host of other well-funded bike taxi companies, including Bounce, Rapido and Vogo, and ride-hailing majors Uber and Ola, both of which run bike taxis.