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Mukesh Ambani backed startup posts loss of Rs 1,800 crore, laying off more employees
The company’s overall cost went up by 3.86 times to Rs 2,054 crore in FY23 from Rs 532 crore in FY22, which was largely led by a jump in advertising spending.
Updated : Nov 06, 2023, 03:45 PM IST
 "Dunzo")
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Mukesh Ambani, India’s richest man, is the key investor in many prominent startups. Companies that have Mukesh Ambani as an investor, do fairly well. However a cash-strapped startup backed by Isha Ambani led Reliance Retail has been in crisis for the past few months and now it has posted a loss of Rs 1,800 crore in FY23, a 288 per cent increase from the previous year. In its consolidated financial statements filed with the Registrar of Companies, Dunzo revealed that its revenue from operations surged 4.1x to Rs 226 crore in FY23 from Rs 54 crore in FY22, reports Entrackr.
Collections from the sale of traded products accounted for 62 per cent of overall operating revenue. In FY23, its income totalled Rs 141 crore. During the previous fiscal year, the remaining income was generated via platform services and warehouse fees.
As an on-demand delivery company, the fees paid to runners were the largest cost centre, accounting for 18 per cent of the overall expenses. This cost increased by 2.7 times, from Rs 134 crore in FY22 to Rs 367 crore in FY23.
The cost of employee benefits for the company increased by 2.4 times to Rs 338 crore in FY23. This amount includes Rs 74 crore for ESOP costs that were settled through cash, according to filings sourced via TheKredible.
The company’s overall cost went up by 3.86 times to Rs 2,054 crore in FY23 from Rs 532 crore in FY22, which was largely led by a jump in advertising spending.
Dunzo’s widening losses come at a time when the company had been hit by the departure of several top-level executives, including co-founders and its finance head, as well as delays in salaries of several employees and mass layoffs across phases.
As per reports, Dunzo is laying off at least “150-200” more employees amid a severe cash crunch. It is likely to trim its workforce further by around 30-40 per cent.
The company has reportedly informed impacted employees that they would receive their full and final settlements in January.
