Dunzo, a well-known name in the hyperlocal delivery sector, has recently witnessed a significant development. Sudarshan N, the Head of Finance at Dunzo, has departed the company, leaving it at a crucial juncture. This comes as Dunzo is in the midst of a fundraising effort and grappling with cashflow issues. In this article, we delve into the details of Sudarshan N’s departure, his background, and the challenges Dunzo is currently facing.
Credits: Money Control
Sudarshan N’s Brief Stint
Sudarshan N, a chartered accountant by trade, worked at Dunzo for less than a year, which was the shortest period of his career. The stability of the company’s finances has been questioned since his departure. Prior to working for Dunzo, Sudarshan N worked for Swiggy, a well-known name in the food delivery business, for about four years. He spent his eight years at Ernst and Young (E&Y), one of the Big Four accounting firms, before joining Swiggy. His leaving Dunzo represents a substantial change in the company’s financial management.
Challenges Faced by Dunzo
Due to the fact that Dunzo has been dealing with numerous financial difficulties, Sudarshan N’s role there was crucial. These difficulties originate from improper cashflow management and include late salary payments, missed repayment dates, and numerous litigation. This shows that the business urgently needs efficient financial management. In order to meet its need for working capital, Dunzo is also now seeking money with a target of $25 to $30 million.
In an effort to resolve these problems, the business teamed up with OneTap, a provider of revenue financing, to guarantee prompt wage payments. These steps, however, might not be enough to address the deeper financial issues. In a townhall meeting, Mukund Jha, Dunzo’s co-founder and Chief Technology Officer (CTO), openly acknowledged that not hiring a Chief Financial Officer (CFO) earlier was a significant mistake. This admission underscores the importance of strong financial leadership in ensuring a company’s financial health and stability.
Delay in Appointing a CFO
While Mukund Jha acknowledged the need for a CFO, the company has not provided any updates regarding the appointment of one. Dunzo’s failure to have a CFO in place earlier has been seen as a significant oversight, especially given the company’s ambitions and growth trajectory. Mukund Jha stated that they should have secured a CFO during their last large equity round in January 2022, but this didn’t happen. The company is now working to rectify this situation, with plans to bring in a CFO around September or October.
Top-Level Departures at Dunzo
Sudarshan N’s departure is not an isolated incident. It is part of a growing list of top-level departures at Dunzo. Co-founders Mukund Jha and Dalvir Suri have also announced their exit from the company. This news is significant as co-founders often play a pivotal role in a company’s vision and leadership. Additionally, Akansha Kumari, the Head of Product at Dunzo, left to lead the product team at Jupiter, a fintech startup. These departures raise questions about the company’s internal stability and leadership transition.
Investment and Shareholders
Dunzo, which was established in 2015, has made a name for itself in the hyperlocal delivery industry. The business has been successful in securing investments totaling close to $500 million from a variety of sources, including Reliance, Google, Lightrock, Lightbox, Blume Ventures, and more. According to Tracxn, a private markets data provider, Reliance is the largest shareholder in Dunzo with a 25.8 percent interest, followed by Google with a 19 percent stake.
Key CEO departures, difficulties with raising capital, and cash flow management issues may have an influence on Dunzo’s capacity to draw in new investors and keep the trust of its current shareholders. Particularly, the departure of co-founders could cast doubt on the business’s long-term goals and strategy.
Possible Impact of the Departure
Sudarshan N’s departure from Dunzo, along with other key executives and co-founders, could have several potential impacts on the company:
Financial Stability: The departure of the Head of Finance and the absence of a CFO can further exacerbate Dunzo’s cashflow challenges. Potential investors may be hesitant to commit funds to a company facing financial management issues.
Leadership Transition: The exit of co-founders and top-level executives may result in a leadership vacuum. A smooth transition to new leadership is crucial to steer the company through its current challenges and future growth.
In conclusion, Dunzo’s recent events, such as Sudarshan N, its Head of Finance, leaving as well as the exit of co-founders and key executives, highlight the difficulties the company is currently experiencing. Dunzo must give the hiring of a CFO top priority, take care of its cash flow problems, and make sure a seamless leadership transition if it is to successfully manage these hurdles. As Dunzo continues its journey in the hyperlocal delivery area, investors, shareholders, and the larger industry will be intently watching the effects of these actions.