Dunzo's FY23 Loss Jumps To Rs 1,800 Crore, Revenue At Rs 226 Crore
Dunzo's auditor wrote that its current liabilities exceeded its current assets by Rs 325.8 crore due to high costs.
Dunzo, the Reliance and Google-backed hyperlocal delivery startup, saw its loss widen nearly four-fold in FY23 as it continues to face an uphill battle, even as its revenue increased.
The Bengaluru-headquartered company posted revenue from operations of Rs 226 crore during the period, up from Rs 54.3 crore in the previous year. However, losses spiked from Rs 464 crore to Rs 1,801 crore for the fiscal, according to Ministry of Corporate Affairs filings sourced via data platform TheKredible.
The company's overall expenses increased to Rs 2,054.4 crore from Rs 531.7 crore in FY22, driven primarily by a spike in advertising expenditure from Rs 64.4 crore in FY22 to Rs 309.7 crore in FY23. Its employee benefit expenses also spiked to Rs 338 crore from Rs 138.3 crore.
The company's current liabilities exceeded its current assets by Rs 325.8 crore, "primarily because of significant high operational costs for building a customer base," according to Dunzo's auditor.
However, Dunzo's management expects operations to continue. "Through revenue growth projected in the subsequent periods and measures undertaken by the management to reduce its costs, it would result in improvements in business operations," it said in response to auditors.
In the filings, the management has also stated that there are "approved business plans, cash flow forecasts, availability of cash and bank balance, plans to secure debt funding arrangements in the next financial year, and discussions for further infusion of equity by existing and potential investors," that will help mitigate the auditor's "material uncertainty" on Dunzo's ability to continue operating.
In response to BQ Prime's queries, Dunzo said FY23 was "about growing sustainably by strengthening our core businesses."
"Overall platform gross merchandise value crossed Rs 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 revamped our store network for Dunzo Daily, moving from a dark store model to a partner store model," a spokesperson for the company said.
"Our logistics/B2B vertical, which reached maturity this year continued to be a strong revenue generator, growing by over 128% while becoming gross margin 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 are aiming to hit corporate level profitability in 12 months," the spokesperson said.
Dunzo is facing a number of headwinds, having seen five board members, including two co-founders resigning, leaving only three members. On top of that, salaries have been delayed for a large number of employees as it struggles to close a funding round to sustain its operations.
