Dunzo's Financial Struggles Deepen with Legal Notices and Unpaid Salaries

Homegrown quick-grocery delivery provider Dunzo has faced a legal notice by Facebook India Online Services Private Ltd ("FBI") and Bengaluru-based software consultancy firm Nilenso over unpaid dues of Rs 4 crore, media reports said.

According to Moneycontrol, citing sources, Dunzo has made partial payments to Facebook but still owes the tech giant approximately Rs 1.5 crore. It had used Facebook's advertising services but had not paid the full amount.
Google, Dunzo's second-largest backer, has recently served a legal notice to the startup, demanding the settlement of unpaid dues.

"Dunzo defaulted in making its payments to FBI under the Contract, despite repeated efforts, verbally and in writing, to rectify the delinquency, Dunzo acknowledged its liabilities and started making the payment to FBI. However, the payment was insufficient to settle all the outstanding balances under the account,” the legal notice read.

According to the report, the demand notices would not exceed Rs 5-6 crore for the startup in total.

While Dunzo was still dealing with Facebook, the report stated that Nilenso, which provides contract software engineers, had also sent Dunzo a demand notice under the Insolvency and Bankruptcy Code (IBC) for payment of outstanding dues.

The Bengaluru-based startup is still owed around Rs 2.5 crore, after paying around Rs 1 crore from its total outstanding.

As per the report, there is pending litigation between Nilenso and Dunzo.

Meanwhile, Dunzo has said it will not be able to pay employees' salaries until early September, a further delay from the earlier deadline of July 20. The company has also delayed the August salary for senior employees to September 4 as well, it said in an email seen by TechCrunch.

The delay comes as the startup focuses on “streamlining our cash flow so we can build a more sustainable business for the future”, according to the Bengaluru-headquartered startup.

Dunzo has said it will not be able to pay employees salaries until early September, a further delay from the earlier deadline of July 20.

The company has also delayed the August salary for senior employees to September 4 as well, it said in an email seen by TechCrunch.

The delay comes as the startup focuses on “streamlining our cash flow so we can build a more sustainable business for the future”, according to the Bengaluru-headquartered startup.


To improve its financial health, Dunzo reportedly capped employee salaries at Rs 75,000 per month, irrespective of their pay packages.

“We need your support as we work through this,” the company wrote in the email.

"For those team members who were expecting the balance payouts of their June salary during this week, we regret to inform you that this has been delayed. The pending salaries for June will now be paid on September 4th, 2023," according to the company email.


Additionally, the July salary for all team members will be paid only on September 4, along with the August salary, it said.

Reports earlier this month mentioned that Dunzo has delayed 50 per cent salary of senior employees. In April, Dunzo laid off at least 30 per cent of its workforce, nearly 300 employees, after it raised $75 million in a fresh funding round.

The company also laid off 3 per cent of its workforce in January amid cost-cutting measures, as the company looked at team structures and network design to build efficiency in its teams.

According to the 'Fairwork India Ratings 2022 Report, when it comes to fair work for gig workers among the digital platform economy in India, Dunzo, along with Ola and Uber, were the worst performers across parameters related to the working conditions of gig workers. - IANS