Google-backed Dunzo raises $45M to expand its hyperlocal delivery startup in India

An Indian startup that is increasingly posing a threat to established food and grocery delivery businesses and e-commerce giants just closed a new financing round to expand its business in the nation.

Bangalore-based Dunzo said today it has raised $45 million from Google, Lightbox, STIC Ventures, and 3L Capital. The new financing round — dubbed Series D — valued the startup at about $200 million, three people familiar with the matter told TechCrunch. The startup has raised $81 million to date.

Dunzo, a four-year-old startup, operates an eponymous hyper-local delivery service. Users get access to a wide-range of items across several categories including grocery, perishables, pet supplies, medicines to dinner from their neighborhood stores and restaurants.

But that’s not all. You can have Dunzo pick up and deliver anything within a city. Forgot your laptop charger at home? Dunzo will bring it to your office. Part of the service’s charm is that its delivery is fast (most of its deliveries take under 25 minutes) and as long as the store is not very far away, it’s not going to cost you more than a $1.

Dunzo is currently operational in eight Indian cities: Bangalore, Delhi, Noida, Pune, Gurgaon, Powai, Hyderabad, and Chennai. The startup said it will use the fresh capital to expand its technology infrastructure and develop partnerships with small and medium businesses to “give them a fighting chance” to compete with major giants.

“We are on course to building the largest commerce platform in the country with the most efficient logistics solution for each city,” said Kabeer Biswas, co-founder and CEO of Dunzo, said.

Dunzo founders told TechCrunch that food category already accounts for a quarter of all deliveries the service processes. As the service scales, it is increasingly becoming a competitor to food delivery startups such as BigBasket, Swiggy, and Zomato.

In recent months, Dunzo has also started to test delivery of smartphones and other products. The startup recently quietly began to deliver Xiaomi smartphones to users in select parts of India. Unlike Amazon or Flipkart, that take a day or two to deliver an item, Dunzo was getting the new phones to users in 30 minutes. Dunzo has tested a similar partnership with Puma, executives told TechCrunch.

The startup today processes more than 2 million orders a month, up from about 50,000 early last year.

In an interesting turn of events, last month Swiggy announced Go, a service that allows users in select cities in India to deliver any kind of product — not just food, thereby entering Dunzo’s territory.

More to follow shortly…

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