Dunzo Calms Employees By Promising 12% Yearly Interest On Their Held-Back Salaries

Grocery delivery app, Dunzo is cash-trapped however it has tried to restore the confidence of employees by promising them to pay interest of 12% per annum on the salary component that was held back from June month. Also, as per the report, the startup has assured them to pay all their dues by September 4, Moneycontrol reported.

Dunzo's payroll team assured the employees in an email to them dated July 27. The copy which is seen by Moneycontrol said "thank you for your patience and continued support. We understand the inconvenience this (delay in salaries) has caused and want to ensure that we provide the possible support for the delay."

At present, Dunzo faces financial challenges, legal notices, and missed payment obligations. Following this the company is not able to pay salary to its employees.

On July 3rd, Dunzo told its employees about deferring the salaries of some 500 of them and also capping the salaries at Rs 75,000 irrespective of the pay package of the individual from June.

Earlier, Dunzo was scheduled to clear its dues by July 20, however, this has been extended to September 4.

GoodReturns.In could not confirm the email statement.

Duzo is struggling with legal notices from biggies like Google, Facebook, Nilenso, India Online Services Private Limited (FBI), Cupshup, Koo, and Glance, for failing to meet its payment commitments. The startup owes somewhat approximately Rs 11.4 crore to these companies.

Dunzo has established itself as the market leader in the quick commerce category in India, which has an addressable market opportunity of $50+ billion. Founded by Kabeer Biswas, Mukund Jha, Dalvir Suri, and Ankur Aggarwal, Dunzo connects merchants, partners, and users to facilitate transactions across courier, e-commerce and merchant logistics.

In April month, reports have stated that Dunzo trimmed 30% of its workforce, leading to 300 layoffs. This was done while securing a funding worth $75 million. The job cuts were due to because Dunzo was planning to pivot its business strategy for turning profitable before launching its initial public offering (IPO) in 2025.

Dunzo is backed by billionaire Mukesh Ambani's Reliance Retail Ventures. Last year, in January, Dunzo had raised approximately $240 million in a funding round that was led by Reliance Industries retail arm.