Barely a month after Bengaluru-based Dunzo raised USD 3.1 million from a clutch of investors, the hyperlocal delivery startup is in talks to raise USD 15-20 million in a fresh round of funding. According to a Mint report a new strategic investor is expected to put in money along with existing backer Google, which will invest on a pro-rata basis.
Last month, Dunzo closed its Series C funding round from MakeMyTrip chief executive Deep Kalra, Milestone Trusteeship Services, Cognizant co-founder N Lakshmi Narayanan, Garware Polyester vice-chairman Monika Garware Modi and Maharashtra-based Raintree Family, among others. The company had said it would utilise the funds for routine operations, brand marketing and setting up infrastructure.
Dunzo’s chat-based personal concierge service was founded in 2015 by Kabeer Biswas, Ankur Aggarwal, Mukund Jha and Dalvir Suri, and is present in six cities, including Bengaluru, Hyderabad and Gurgaon. Dunzo has evolved from the personal concierge service to an AI-enabled deliver-anything-service. Currently it delivers food, grocery, meat, medicine and pet supplies from a host of local businesses listed on its app.
In December 2017, Dunzo became the first startup to get a direct investment from Google. The internet giant led a USD 12.3 million funding round along with Aspada Investments and Blume Ventures, and picked around 33.8% stake.
Google has increasingly shown interest in the Indian startup ecosystem over the years. In December 2018, it acquired Bengaluru-based startup Sigmoid Labs, which runs the app ‘Where is My Train’. Earlier in May, Google made its second direct investment in Mumbai-based online-to-offline fashion and lifestyle platform Fynd. Although Google has invested directly in only two Indian technology companies, it brought its Launchpad Accelerator to India last year. Google’s growth equity fund CapitalG has also invested in a slew of Indian startups.
Before Google came on board, Dunzo had raised over USD 2.5 million in two rounds from Blume Ventures and Aspada Investments.
Citing two unnamed sources, the Mint report said Dunzo plans to get into the B2B model as well. It wants to utilise its delivery fleet to provide logistics solution for businesses. Xiaomi has already partnered with Dunzo for its Mi Home stores.
Indian hyperlocal delivery segment has caught the attention of investors with delivery startups looking to expand their service across the board. In February, food delivery platform Swiggy announced it would deliver products such as groceries, fresh produce, pet supplies, health supplements, baby care products, etc. The pilot is slated to launch in Gurgaon in partnership with 3500 stores. Last year, BigBasket diversified its business with BB Daily, a standalone app to deliver milk and vegetables early morning.
According to a 2018 report by Gurgaon-based market research firm Ken Research, India’s hyper-local market is poised to grow beyond Rs 2,306 crore (USD 329 million) by 2020.