Google Invests in Dunzo: $40 Million Funding Round

Google is making another investment in an Indian startup. The company, which revealed a $10 billion fund last year to support investment in the world’s second-largest internet market, announced on Tuesday its participation in a $40 million funding round for Dunzo, a hyperlocal delivery startup based in Bangalore. Google had previously invested in the company.

Dunzo, established five years ago, stated that Google, along with Lightbox, Evolvence, Hana Financial Investment, LGT Lightstone Aspada, and Alteria, were among the participants in its Series E financing. This round brings the total funding raised by the company to $121 million.

Dunzo operates a hyperlocal delivery service under the same name in approximately twelve Indian cities, including Bangalore, Delhi, Noida, Pune, Gurgaon, Powai, Hyderabad, and Chennai. The service provides users with access to a diverse selection of products spanning numerous categories, such as groceries, fresh produce, pet supplies, medications, and meals from local stores and restaurants.

Industry estimates indicate that e-commerce currently represents less than 3% of total retail sales in India. The majority of sales within the country are generated by traditional brick-and-mortar stores and neighborhood businesses located throughout the nation’s many cities, towns, villages, and slums.

Dunzo is developing a new approach to e-commerce and delivery within India, creating competition for major players like Amazon and Flipkart (owned by Walmart), as well as other local food and grocery delivery services such as Swiggy, Zomato, BigBasket, and Grofers. The platform is also utilized by individuals for the transport of various items, including laptop chargers, wallets, and lunch boxes, across the city.

“As businesses increasingly adopt digital technologies, Dunzo is assisting small businesses with their digital transformation, supporting their recovery and growth,” stated Caesar Sengupta, VP at Google. “Through our India Digitization Fund, we are dedicated to collaborating with innovative Indian startups to foster a truly inclusive digital economy that benefits all.”

Kabeer Biswas, CEO and co-founder of Dunzo, reported that the startup’s annual gross merchandise value (GMV) has reached approximately $100 million. (GMV was once a common metric used by e-commerce companies to showcase growth; however, it is now often considered an unreliable indicator of a startup’s progress. Many companies have ceased using GMV. Furthermore, a focus on GMV often suggests a company is not yet profitable, which is the case with Dunzo.)

“Dunzo’s core purpose became even more relevant in 2020. We have been impressed by the increasing reliance on our platform by both merchants and users. We are confident that we are establishing a model for building sustainable and financially responsible hyperlocal businesses. Our team is fully committed to helping local merchants connect with their customers and create a highly valued consumer brand in the country,” Biswas said in a statement.

Google, which invested $4.5 billion in Jio Platforms last year, has recently provided backing to social news application DailyHunt and Glance, a component of ad technology company InMobi Group that is actively expanding its content delivery methods on Android lockscreens. Google is also reportedly in discussions with local social media platform ShareChat and may invest over $100 million in the Indian startup, as reported by TechCrunch earlier this month. Reports regarding Google’s interest in ShareChat have also appeared in local media outlets such as Economic Times and ET Now.