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Following several weeks of crisis triggered by a severe cash crunch at Reliance Retail-backed Dunzo, cofounder Dalvir Suri is leaving the embattled instant delivery startup, according to multiple people aware of the matter. His departure comes after discussions on the issue with cofounder and chief executive Kabeer Biswas over the last couple of months at least, they added.
In recent weeks, Suri — who joined the Bengaluru startup as a cofounder six years ago — was closely involved in the company’s business-to-business delivery arm, Dunzo Merchant Services (DMS). The vertical had emerged as Dunzo’s core business driver as it scaled down consumer-facing operations across the seven geographies it was earlier present in.
In future, DMS will likely account for 70-80% of Dunzo’s overall business, ET reported on September 25.
“It’s now final and he (Suri) is done with Dunzo,” said one of the persons cited above.
“He (Suri) had planned to make an exit earlier but stayed on as the firm was engulfed in multiple crises over the past few months,” the person cited said.
In addition to overseeing operations, Suri was also coordinating with key clients such as Reliance JioMart, which is owned by Dunzo’s largest shareholder. Reliance Retail has nearly 26% stake in the delivery firm.
The crisis-ridden startup firm has drastically reduced the scale of its quick commerce operations to conserve cash over the past year. It now doesn’t run its own dark stores but offers services through third-party grocery stores.
“Suri and (cofounder) Mukund Jha were doing most of the staff-related conversations over the past couple of months — whether it was job cuts or operating issues. Biswas was fully focused on fundraising,” said a second person aware of the situation.
Biswas confirmed the development to ET, saying Suri had “been meaning to take a break for some time now… He plans to pursue new journeys.”
The CEO said Suri had been instrumental in building every new line of business at Dunzo. “He has been the key zero-to-one person from the founding team that just gets things done. We are doing some organisation-wide restructuring from this quarter and the DMS business has very capable leadership that’s picking up directly from him,” said Biswas.
Besides Suri, Biswas and chief technology officer Jha, Ankur Agarwal is the fourth cofounder of the startup.
Dunzo, which started operations in 2014, initially offered hyperlocal delivery and pick-and-drop services. It later expanded to quick commerce and last mile business-to-business (B2B) delivery.
Prior to joining Dunzo, Suri was head of operations at software development and consulting firm Cybrilla Technologies.
Glimmer of hope
Suri’s exit comes as the troubled company has finally been able to stitch up a $30-35 million round to fend off a cash-flow crisis that has triggered multiple layoff cycles.
The funding round is expected to close formally later this month.
As part of the proposal to raise new capital, Dunzo has proposed to halve its monthly burn rate to $300,000 and trim its headcount to just around 200, ET reported on Monday. The fundraise will have onerous liquidity preference terms for existing investors, and will likely see participation from the likes of Reliance Retail, alongside Google, Lightrock and DS Group.
A disagreement among Dunzo shareholders on the extent of reduction in the startup’s valuation was delaying the closing of new financing, ET reported on August 22.
On September 25, the firm instituted fresh layoffs — the fourth round since January, at which time it had over 1,000 employees. The number of people impacted by the latest round of layoffs could not be ascertained.
Employees are yet to receive their July salary and a portion of their June pay. Dunzo paid August salaries through payroll financing app OneTap. It will also be vacating its current office to move into a smaller one.
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