Google is writing check to another startup in India. The Android-maker, which last year unveiled a $10 billion fund to invest in the world’s second largest internet market, annpunced that it is participating in a $40 million investment round of hyperlocal delivery startup Dunzo, a Bangalore-based firm that it has also previously backed.
Five-year-old Dunzo said Google, Lightbox, Evolvence, Hana Financial Investment, LGT Lightstone Aspada, and Alteria among others participated in its Series E financing round, which brings its to-date raise to $121 million.
Dunzo operates an eponymous hyper-local delivery service in nearly a dozen cities in India including Bangalore, Delhi, Noida, Pune, Gurgaon, Powai, Hyderabad and Chennai. Users get access to a wide-range of items across several categories, from grocery, perishables, pet supplies and medicines to dinner from their neighborhood stores and restaurants.
E-commerce accounts for less than 3% of all retail sales in India, according to industry estimates. Mom and pop stores and other neighborhood outlets that dot tens of thousands of cities, towns, villages and slums across the country drive most of the sales in the nation. The way Dunzo has grown, it poses a challenge to e-commerce firms such as Amazon and Walmart-owned Flipkart, as well as local food and grocery delivery startups such as Swiggy, Zomato, BigBasket, and Grofers. Several people also use Dunzo to pick up and move random items such as a laptop charger or wallet or a lunch box from one point in the city to another.
“As merchants go digital, Dunzo is helping small businesses in their digital transformation journey in support of business recovery,” said Caesar Sengupta, VP, Google, in a statement. “Through our India Digitization Fund, we’re committed to partnering with India’s innovative startups to build a truly inclusive digital economy that will benefit everyone.”
Kabeer Biswas, chief executive and co-founder of Dunzo the startup has grown its annual gross merchandise value business to about $100 million. (GMV used to a popular metric that several e-commerce firms relied on to demonstrate their growth, however, it’s one of the meaningless ways to gauge a startup’s growth. Most firms have stopped using GMV. Additionally, when a startup speaks GMV language, traditionally it has meant they are anything but close to profitability, which happens to be true in the case of Dunzo.)
“Dunzo’s mission resonated stronger than ever in 2020. We have been amazed by everything merchants and users have started to depend on the platform for. We truly believe we are writing a playbook for how hyperlocal businesses can be built with sustainable unit economics and capital responsibility. As a team, we are more focused than ever to enable local Merchants to get closer to their Users and build one of the most loved consumer brands in the country,” Biswas said in a statement.