Reliance, Lightrock reps quit Dunzo board in fresh trouble for cash-strapped firm

A day after quick-commerce platform Dunzo’s co-founder Dalvir Suri quit the company, it has emerged that representatives from Reliance Retail have stepped down from the board. Reliance Retail’s group chief of business operations Ashwin Khasgiwala and finance head Rajendra Kamath quit the company’s board in early August, sources confirmed to DH.

Reliance Retail is Dunzo’s largest shareholder with an almost 26% stake in the company. Both Dunzo and Reliance Retail declined to comment for the story.

As per reports, another backer, Lightrock India, also pulled its representative Vaidehi Ravindran from Dunzo’s board around the same time. Lightrock owns 8.6% stake in the company, according to startup data platform Tracxn.

Another co-founder, chief technology officer Mukund Jha, has also reportedly departed from the firm, but the development has not been confirmed by Dunzo.

The board exits have come at a time when the company is grappling with a cash crunch, along with delayed payout to employees and a slew of layoff rounds. Dunzo is also in the midst of organisation-wide restructuring, chief executive Kabeer Biswas had noted on Monday while announcing Suri’s departure. Only Biswas, along with Siddharth Talwar from Lightbox and Hongjim Kim from STIC Investments remain on the company’s board.

Dunzo has recently been in talks to raise additional funds to the tune of $25-35 million, and Reliance along with existing backer Google were expected to be part of the fresh round. Along with fundraising efforts, the company has also embarked on a cost-cutting initiative to address its liquidity crunch, which has included shutting down at least 50% of its dark stores and multiple rounds of layoffs impacting over 400 employees, the latest of which came on September 25.

Dunzo’s inability to credit salaries, and employee stock options to current and former employees, including those that had been laid off, has been a point of contention for months now. It had earlier blocked a portion of salaries from June and July, promising full payment by the month’s end. However, it has since missed that deadline and deferred the date multiple times.

The company had last raised $75 million in April through convertible notes from Reliance, Google and other existing investors, while laying off nearly 300 employees from its payroll. Biswas had noted at the time that the company will only operate dark stores that are profitable or near profitability, and will instead focus on partnering with supermarkets and other merchants.