Tata Digital is leaving no stone unturned to diversify the Tata Group operations. After successfully gaining the majority stakes in Big Basket and CureFit, the company is in advanced talks to acquire majority stakes in hyperlocal delivery startup Dunzo.
Tata Digital and Dunzo Deal
Three internal sources who are well aware of the Dunzo-Tata Digital deal said that Tata Digital is on the way to acquire controlling stakes in Dunzo. The deal will also value Dunzo at $150-200 million.
When contacted, Tata Digital did not say anything related to the current development.
When Dunzo was contacted related to recent Tata Digital investment news, the startup rejected the rumor and Dunzo’s spokesperson said:
“We’re very surprised by the buyout question, which is not up for discussion at all. That being said, we want to highlight: Dunzo has doubled as a business in the last 75 days and processes over $200 million in annualized gross merchandise (GMV) value.”
The company’s spokesperson further added:
“Dunzo’s last round in CY20 (the calendar year 2020) was at a significantly higher valuation than the numbers you’ve mentioned.”
The last month has been quite eventful for Tata Digital. First, it acquired majority stakes in Big Basket before 2 weeks and on Monday, it announced that the company has invested $75 million in Mukesh Bansal-led health startup Curefit.
Tata Digital is also in advanced talks with 1mg to acquire majority stakes in an online pharma company. With all these acquisitions, Tata Digital has come one step closer to its dream project of Super App. Under the Super App initiative, Tata Group has plans to provide all major services including health, IT, grocery, manufacturing, retail, etc under a single app named Super App.
Dunzo’s Financial Growth
In 2021, Dunzo completed the Series E funding round and raised $40 million. Investors including Google, Lightbox and Blume Ventures, etc support Dunzo financially.
As per Bloomberg’s April report, Dunzo had plans to raise $150 million and the startup also wanted to achieve $1 billion revenue in the coming two years.
Last year, Dunzo completed a financing round of $11 million led by Alteria Capital. Alteria Capital also helped the firm in 2018 by providing around $1 million.
In its biggest funding round of 2019, Dunzo collected $45 million from existing investors including Google, Lightbox, US-based growth equity firm 3L Capital, and South Korea’s STIC Investment and STIC Ventures. Blume Ventures, Kalpavriksh Fund, and Patni Wealth Advisors are also some other investors supporting Dunzo, as reported by VCCEdge.
In June 2020, Dunzo was valued at around $220 million, as per the valuation report filed with the Registrar of Companies.
In FY2020, Dunzo recorded 400% growth to Rs 77 crore in its revenue from operations. In the same financial year, the company’s expenses grew to Rs 414 crore from Rs 185 crore in FY2019. Dunzo’s loss also grew to Rs 343 crore in FY2020 compared to Rs 169 crore losses in FY2019, as per report filings under Registrar of Companies.
Covid-19 pandemic has made hyperlocal delivery startup very popular. Due to that, competition has also increased in the hyperlocal delivery sector. Other than Dunzo, Flipkart also started a hyperlocal delivery app named Flipkart Quick. Swiggy, the online food delivery giant, also launched Instamart to make last-mile delivery faster.
