Dunzo says it aims to hit corporate-level profitability in 12 months after auditor Deloitte casts doubt over financial health
Dunzo reported a net loss of Rs 1,801 crore in FY23 as it battled challenges to pay salaries, resorted to layoffs, and navigated operational hurdles to keep the engines running.
Quick commerce and courier services firm’s ability to continue operating as a going concern depends on the inflow of additional funding and improvements in business operations, its auditor Deloitte flagged in the FY23 performance filings registered with the Ministry of Corporate Affairs.
A company is typically considered a 'going concern' if it has the resources to continue making enough money to stay afloat for the foreseeable future.
Dunzo, which is already facing a slew of challenges, including a liquidity crunch and the inability to prove its business model, posted a loss of Rs 1,801 crore in the 2023 financial year, with current liabilities exceeding its current assets by Rs 325.8 crore mainly due to “significant high operational costs for building customer base”, according to the auditor.
“The group’s ability to continue as a going concern is significantly dependent on the availability of additional funding, and improvement in business operations. These events or conditions, along with other matters as set forth in aforesaid note, indicate that a material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern,” said Deloitte.
In response to YourStory's query on this, a Dunzo spokesperson said, “The audit report is from six months back and we’ve made significant developments since on business and funding. In FY23, our overall platform GMV crossed INR 1,500 crore representing the true scale of our business."
"Crucially, our business burn is now neutral as we successfully implemented cost cuts and more importantly optimised our store network for Dunzo Daily, moving to a hybrid model. Our logistics/B2B vertical, which reached maturity continued to be a strong revenue generator, growing by over 128% while becoming GM neutral."
“There’s a lot to be excited about--from our growing presence on the ONDC network, our strong logistics business, to the new avatar of Dunzo Daily. We aim to hit corporate level profitability in 12 months,” the spokesperson added.
The Kabeer Biswas-led company’s total expenses surged 286% to Rs 2,504 crore in FY23, hurt by an increase in employee benefit and other expenses. However, the company's revenue from operations jumped 4.1X to Rs 226 crore from Rs 54 crore in FY22.
The cash-strapped startup has seen a slew of senior-level exits in the last few months, with co-founder Dalvir Suri being the latest one to announce his departure.
Dunzo also trimmed its workforce and partnered with payroll financing firm OneTap to disburse salaries to remaining employees, while it tries to secure additional funding and keep the engines running.
Edited by Megha Reddy