Bengaluru-based quick commerce platform Dunzo is likely to raise nearly $100 million in an investment round through convertible notes, The Economic Times (ET) reported.
This funding will be a part of Dunzo’s planned $150 million investment round. Reliance Retail, its existing backer, may infuse the majority amount, while Abu Dhabi Investment can also join the round. Dunzo is also looking for some other backers.
Reliance Retail is the single largest investor in the company with 26 per cent of shareholdings. In January 2022, it raised $240 million in an investment round led by the company. The latter joined Dunzo as a strategic investor.
The start-up achieved a valuation of $775 million with the funding in January 2022.
The possible fundraising is expected to help the company to fight with its competitors.
Amid the ongoing economic downturn, multiple Indian start-ups were seen to bag funds by issuing convertible notes. Dunzo will be the next addition to the list. Raising money through convertible notes helps companies to avoid a valuation slash.
Like other enterprises, Dunzo also took cost-cutting measures to keep the business on the profitability track during economic hardships. It corrected its incentive pattern and replaced cloth bags with cheap paper bags. According to an ET report, some of its changes led the delivery staff to protest against the company.