Cash-strapped Dunzo’s co-founder Dalvir Suri exits; Reliance Retail nominees step down from the board, say sources

Quick commerce platform Dunzo’s co-founder Dalvir Suri has quit the company at a time when the startup is facing a funding crunch, delayed payments to employees and layoffs.

In a statement to CNBC-TV18, Co-founder and CEO Kabeer Biswas said, “Dalvir has been instrumental in building out every new line of business at Dunzo. He has been the key zero to one person from the founding team who just gets things Dun. He has been meaning to take a break for some time now — and with over six years spent building Dunzo, he plans to move forward to pursuing new journeys.”

Biswas added, "We are making some org-wide changes in restructuring our business starting this quarter, and the DMS business (Dunzo Merchant Services: B2B vertical) has very capable leadership that's picking up directly after him."

Meanwhile, reports have also suggested that Mukund Jha, co-founder and chief technology officer (CTO) of Dunzo is also leaving the company, making him the second co-founder to depart in a week. However, the embattled startup has denied this development, saying Jha remains an integral part of Dunzo’s leadership team.

“While we are restructuring the org with new leaders driving key mandates, Mukund will continue to be an important part of the strategic leadership team guiding and directing Dunzo’s future roadmap,” a Dunzo spokesperson told CNBC-TV18.

The news of Jha’s potential departure has not been formally announced within the startup. According to a Moneycontrol report, only a select few employees have been informed of this development. The report also suggests that Jha has withdrawn from day-to-day operations, and a formal announcement regarding his status may be expected in the coming weeks.

In another development, sources have confirmed to CNBC-TV18 that Reliance Retail nominees have stepped down from Dunzo’s board.

The Morning Context had earlier reported that Jha had exited Dunzo's board on September 1. In August, Suri, Vaidhehi Ravindran from Lightrock and Reliance Retail's Rajendra Kamath and Ashwin Khasgiwala had all stepped down from the company's board.

Only CEO Biswas, Siddharth Talwar from Lightbox and Hongjim Kim from STIC Investments remain on the startup's board.

Dunzo has four cofounders, and now with the exit of two cofounders only Biswas and Ankur Aggarwal are left in the company. Jha and Suri along with their co-founder Ankur Aggarwal have no ownership in Dunzo. The three of them only drew salaries and had ESOPs (employee stock ownership plans), like several other employees. Dunzo co-founder and CEO Kabeer Biswas owns about 3.6 percent of Dunzo, making him the only co-founder who holds a stake, as per a Moneycontrol report.

Contrary to the report, sources close to the company have told CNBC-TV18 that all founders have equity in the startup.

The exits come at a time when the cash-strapped grocery delivery platform is seeking to raise $20 million more from Reliance Retail. Dunzo had secured funding worth $75 million and both moves were targeted at the delivery platform turning profitable before its initial public offering (IPO) in 2025. It has so far raised close to $500 million since 2015 from Reliance, Google, Lightrock, Lightbox, Blume Ventures and several others. Reliance is the largest shareholder with a 25.8 percent stake in the company, and Google was the second-largest with around 19 percent ownership in Dunzo, according to Tracxn.

Bengaluru-headquartered Dunzo reported a net loss of Rs 464 crore in FY22. This showcases a twofold spike from reporting a net loss of Rs 229.1 crore in FY21. According to the company’s annual financial reports, the rise in operational costs led to a spike in loss. Dunzo lost Rs 230 on each Dunzo Daily order during the first half of 2022 that is from January to June. EBITDA loss in June was Rs 176 crore. The company is yet to disclose its financials for FY23.

The quick commerce platform also cut its workforce by 30 percent, meaning close to 300 employees were laid off in April in its second round of job cuts. Dunzo in the past had deferred the salary of its employees due from the month of June.