Due to a financial shortage, Google and Reliance Industries-backed quick commerce company Dunzo have postponed wage payments for the second time in two weeks. For top workers, the corporation used to restrict reimbursements to INR 75,000 ($1,007), but it now intends to pay all past-due salaries by September 4 These limitations have an impact on 40–45% of their employees. According to reports, the corporation is working to raise $50 million from new investors.
Reliance Industries and the Google-backed startup had banned payouts at 75,000 for individuals earning more, even if June salaries were paid on time.
Dunzo informed its staff in a letter on Tuesday that it will pay salaries for July and August, as well as the unpaid part for higher earners, by the fourth of September. Prior to that, the business had made the decision to pay the outstanding balance by July 15; there was no intention to postpone other employees’ payments.
The payroll team at Dunzo emailed staff, “At this time, we need to concentrate on streamlining our cash flow so that we can build a more sustainable business for the future.” A copy of the email has been examined by Mint.
The decision to restrict pay at $75,000 was claimed to affect 500 people, or 40–45% of the staff. In April, Dunzo let go of almost 30% of its workforce.
Payday for unpaid pay for June has been changed to September 4, 2023. All team members will also get their July salaries on September 4, along with their August salaries. We have set September 4 as the deadline for any outstanding wage payments, but we’re striving to find a solution as soon as possible to lessen the effect on our team members, the letter stated.
An organization spokeswoman did not return calls for comment.
Through convertible notes, Dunzo secured $75 million in debt financing in April. In addition to Google and Reliance, it also has investors including Lightbox, Evolvence, and Alteria Capital.
According to a source familiar with the business’s goals, Dunzo is now seeking to raise about $50 million from new investors. Due to their difficulty raising capital, many high-growth firms are reaching the end of their financial runway.
While most businesses have made efforts to reduce burn by switching directions or realigning their operations to improve unit economics, others appear to be having difficulty.
According to reports, Dunzo is transitioning to an asset-light strategy in which it would close half of its dark stores and keep just the ones with the best unit economics.
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