Cash-strapped Dunzo is likely to vacate its office space in Bengaluru to save costs, co-founder and CEO Kabeer Biswas told employees in a townhall on September 15.
The move to vacate its headquarters on Wind Tunnel road in Bengaluru comes at a time when Dunzo has been struggling to manage its cash flow situation. Thanks to the cash crunch, Dunzo has also been delaying salaries.
Dunzo was initially supposed to clear all dues on July 20, but multiple delays later, Biswas has set November as the new deadline.
The portion of salaries held-back from June and July will now be paid in November, Biswas told employees on September 15 in what was yet another extension for the quick-commerce company.
“We were told that Dunzo is looking to give up its office space 2-3 months back because there are hardly any people working from the office. But now that Kabeer (Biswas) has told us it looks like a definite move and given the situation, the company could use some extra cash,” a senior employee told Moneycontrol.
While Biswas made gave no immediate update about a new office, it was likely that the company will ask employees to work from home (WFH) as it continues to look for solutions to better its cash flow, the employee added.
In the past Dunzo has taken other cost-cutting measures, like firing employees across at least three rounds.
The cashflow situation at Dunzo seems to be getting worse as its funding talks make little progress. The situation is so grave that the company has had to tie up with external parties to meet working capital requirements.
Earlier this week, Moneycontrol reported that Dunzo also partnered with OneTap, an RBI-registered NBFC, to pay August salaries to current employees.
Even if Dunzo begins clearing dues by Friday, it has other payments to make and needs to raise money to meet its working capital requirements. The company has also been slapped with legal notices from over seven companies and vendors and has to pay over Rs 11 crore in total, Moneycontrol had reported earlier.
Dunzo has so far raised close to $500 million since 2015 from Reliance Retail, Google, Lightrock, Lightbox, Blume Ventures and several others. Reliance is the largest shareholder with a 25.8 percent stake in the company, and Google was the second-largest with around 19 percent ownership in Dunzo, according to Tracxn, a private markets data provider.
Disclaimer: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
(This is a developing story, please check back for more updates)
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