In a bid to reduce operational costs, Dunzo, a quick-commerce startup and a significant recipient of investments from Google, has made a strategic shift by moving all employee accounts from Google Workspace to Zoho. This move is expected to result in a cost reduction of at least one-third for Dunzo, a company that has been facing financial challenges since July, leading to delayed salaries, layoffs of over 500 employees, and relinquishing office space in Bengaluru.
Google Workspace, which includes Gmail, Meet, Sites, Calendar, AppSheet, and other applications, is integral for Dunzo’s employees, facilitating schedule synchronization and creating a comprehensive company-related information database. However, due to nonpayment to a cloud consultant, Dunzo’s access to Google Workspace was abruptly revoked, resulting in the loss of email history, ongoing conversations, and important planning documents stored on Google Drive.
Confirming the migration, a Dunzo spokesperson stated that it was a routine business decision with initial challenges that have since been resolved. The transition to Zoho also involved a change in email IDs for Dunzo employees, shifting from a .in extension to a .com extension.
Crucially, the move to Zoho is accompanied by substantial cost savings, as Zoho charges only Rs 489 per user per month for a similar suite of offerings compared to Google’s Rs 1,600. This financial optimization aligns with Dunzo’s broader strategy of downsizing, aiming to reduce its workforce from over 1,300 employees in March to a total not exceeding 200.
Dunzo’s financial challenges have been pronounced, with its net loss soaring to Rs 1,802 crore in FY23, marking a 288 percent increase from the previous year. Deloitte, the company’s auditor, has expressed doubts about Dunzo’s ability to continue as a going concern. Despite raising nearly $500 million since 2015 from investors such as Reliance Retail, Google, Lightrock, Lightbox, and Blume Ventures, Dunzo’s restructuring reflects the harsh realities of the market. Reliance remains the largest shareholder with a 25.8 percent stake, followed by Google with around 19 percent ownership in Dunzo, according to Tracxn, a private markets data provider.
It is worth noting that Moneycontrol, the source of this information, is a part of the Network18 group, controlled by Independent Media Trust, with Reliance Industries as the sole beneficiary.
