Returning investor Alteria Capital infuses fresh capital in Dunzo

Bengaluru-based Dunzo Digital, which runs an eponymous hyperlocal logistics platform, has raised Rs 27.5 crore ($3.7 million) in a growth funding round from returning investor Alteria Capital.

The fresh infusion, carried out by Milestone Trusteeship Services on behalf Alteria Capital India Fund I, involves a mix of debt and equity components.

Dunzo issued 2,500 Series G debentures worth Rs 25 crore and 220 Series E1 compulsorily convertible cumulative partly paid preference shares worth Rs 2.5 crore to Alteria Capital, regulatory filings show.

According to a valuation report filed with the Registrar of Companies, Dunzo, as of June 2020, was valued at $220 million.

Dunzo’s revenue from operations grew over four fold to Rs 77 crore for the year ended March 31, 2020, from Rs 17 crore in FY19. Operational expenses grew to Rs 414 crore in FY20 from Rs 185 crore a year ago. The company posted a loss of Rs 343 crore in FY20, up from Rs 169 crore the previous year.

Its revenue dropped to Rs 30.5 crore in the April-June quarter, the company said at the time, on account of Covid-19 related temporary operational suspensions and delays.

In September, the company received $16 million in the first tranche of the $27.9 million-targeted Series E round. Returning investors Google and Lightstone each invested about $8 million. Alteria previously funded the company in a $11 million debt round in February. The startup has raised a total of $119 million  so far, as per data on VCCEdge. 

Founded in 2015 by Kabeer Biswas, Ankur Agarwal, Dalvir Suri and Mukund Jha, Dunzo delivers grocery from shops and food from restaurants, and provides instant local courier services. It has operations in Bengaluru, Mumbai, Delhi, Gurugram, Chennai, Hyderabad, Jaipur and Pune.

Competition in the hyperlocal space has been heating up as the pandemic has brought in a lot more customers to online commerce.

In July, Walmart-owned ecommerce major Flipkart launched a hyperlocal delivery app Flipkart Quick in Bengaluru. The service, which claims to deliver products within 90 minutes, has a minimum fee of Rs 29 and operates between 6 am and 12 am. It offers over 2,000 products in categories such as grocery, fresh produce, dairy, meat, mobiles, electronics accessories, stationery items and home accessories.

In September, Naspers-backed food delivery firm Swiggy rolled out Instamart, a new offering in its grocery business, to make last mile delivery faster and sell a wider assortment of products. Instamart, which operates between 7 am and 12 am, claims to deliver products within 45 minutes of order placement. Swiggy already operates in the last mile grocery delivery segment with Swiggy Stores, where it sells essentials such as fruits and vegetables, meat, pet care and wellness products by aggregating from existing offline stores.

Amazon, BigBasket and Grofers are also expanding their grocery delivery operations after facing some initial hiccups during the Covid-19 lockdown.