Dunzo, the on-demand delivery company, has reported significant financial challenges, with a loss of Rs 1,800 crore in the fiscal year 2023. This represents a staggering 288% increase from the previous year. However, the company did experience a notable boost in revenue, with its income from operations surging to Rs 226 crore in FY23 from Rs 54 crore in FY22, indicating a 4.1x growth, as reported by Entrackr.
A significant portion of Dunzo's operating revenue, approximately 62%, came from the sale of traded products, amounting to Rs 141 crore in FY23. In the previous fiscal year, the remaining income was generated through platform services and warehouse fees.
The fees paid to runners, who facilitate deliveries, constituted the largest cost center for the company, making up 18% of the total expenses. This cost escalated by 2.7 times, from Rs 134 crore in FY22 to Rs 367 crore in FY23.
The cost of employee benefits also increased substantially, by 2.4 times, to Rs 338 crore in FY23, including Rs 74 crore for ESOP (Employee Stock Ownership Plan) costs settled through cash.
Overall, the company's costs rose significantly, by 3.86 times, to Rs 2,054 crore in FY23 from Rs 532 crore in FY22, primarily driven by a substantial increase in advertising expenditure.
These widening losses coincide with a series of challenges faced by Dunzo, including the departure of top-level executives, co-founders, and its finance head, along with delays in employee salaries and significant layoffs.
As per reports, Dunzo is in the process of laying off at least 150-200 more employees due to severe cash constraints. It is anticipated that the company will further reduce its workforce by around 30-40%.
Dunzo has informed the affected employees that they will receive their full and final settlements in January. These financial difficulties suggest a challenging period for the company, which will need to address its financial sustainability moving forward.
(With Agency Inputs)