Dunzo to pay Aug salaries to employees by Sep 15, ties up with payroll service OneTap
Cash-strapped Dunzo told employees on Wednesday that it is still waiting for the fresh funding to come through.
Quick commerce firm told employees on Wednesday that it has partnered with payroll financing company OneTap to disburse salaries for the month of August as it awaits fresh funding.
In an email to employees sent on Wednesday, the cash-strapped firm said that all employees will have to download an app and perform a one-time KYC to facilitate the salary transfer, which will be done by Friday. Last week, the employees were informed that the salaries for August would be paid by September 13, according to two persons in the know.
"You should receive details of the process by 8:30 PM this evening. You will be required to facilitate salary transfer; on completion of the process, salaries will be credited to your account latest by Thursday/Friday EOD. To ensure this is seamless, we will also set up a call to address any questions you may have. Thank you once again for your support, and please stay tuned for a follow-up update," Dunzo said in the email to employees.
YourStory has seen a copy of the email.
We have reached out to Dunzo for comments. The story will be updated with the responses.
OneTap is an RBI-registered non-banking financing corporation (NBFC) operated by Capital Trade Links Limited which is listed on the Bombay Stock Exchange (BSE).
"Please be assured that this partnership is between Dunzo and OneTap, and hence, all repayment liability rests solely with Dunzo. For team members, this will be treated as a regular salary credit with no interest or repayment obligation," Dunzo told employees in a follow-up email sent on Wednesday.
The Reliance Retail-backed firm informed employees in June that it would pay salaries for August by September 4, as it navigates a liquidity crisis. However, last week, it revised its payment timeline to September 13, according to the two people quoted above.
Balance payouts for the month of June (for those earnings upwards of Rs 75,000 per month) and full salaries for July were also delayed indefinitely, YourStory reported last month.
As Dunzo struggled to raise a fresh round of funding, the quick commerce company had capped salary payouts for the months of June and July at Rs 75,000, which impacted about 15-20% of its employee base mostly from the leadership team.
In July, Dunzo had promised to pay 12% annual interest on the salary amount held back for June and July to the affected employees. The interest will be cleared at the earliest, along with the balance payable, said the company in an earlier email to employees, stating that it will announce the exact date of payment the following week.
Meanwhile, off-roll workers employed as pickers in Dunzo's dark stores in Bengaluru refused to work starting August 15 as their July salaries were delayed. They resumed work on August 19 after receiving payouts for July.
Dunzo had last raised $75 million in convertible notes, with the lion's share coming from returning investors, Google and Reliance Retail. Reliance Retail holds close to 25.56% share in the company while Google holds about 18.53%, according to Tracxn, making them the largest shareholders in the company.
The quick commerce venture was valued at $757 million as of May 2022, according to data research platform Tracxn, and has raised $497 million to date in equity investment. The company’s main line of business is its B2C (business to consumer) grocery delivery service, Dunzo Daily, which competes with Zomato-backed Blinkit and Zepto, apart from Swiggy’s grocery delivery service Instamart.
In FY22, Dunzo Daily contributed nearly 90% of the company’s revenues, however, the vertical has been struggling. Dunzo shut down operations for the service across all cities—barring Bengaluru—earlier this year.
Dunzo earned Rs 54.3 crore in revenue from operations in FY22, largely from its online platform services. On the other hand, its net loss more than doubled—from Rs 229.1 crore in FY21 to Rs 464 crore in FY22.
(The story was updated to reflect details on Dunzo's partnership with OneTap and a quote from a follow-up email)
Edited by Kanishk Singh