Dunzo, the hyperlocal logistics firm has released its unaudited numbers for the first 10 months of FY20 which reflects a growth by 4.5X in its operating revenue. The revenue shot up to Rs 71.56 crore in FY20 from Rs 16.83 crore in FY19. These numbers will be much lesser once the company counts the amount due to the delivery partners.
Kabeer Biswas, Dunzo’s co-founder and CEO explained the reason behind the difference as, “Revenue recognition and revenue realisation working are two different things. About 90% of the revenue made in FY19, we didn’t recognize as most of the income passes on to delivery partners, thus, there is no need to recognise it. If you go through the revenue recognition number also, we have grown by 4X year on year.”
The company makes 20% profit on every order which is a combination of merchant and delivery fees. Dunzo’s expenses have increased massively to achieve their targets. It’s annualized total expenditure during FY20 was Rs 407.6 crore which is 2.3X more than Rs 178.3 crore in FY19. Even the losses of the firm grew by 2.1X from Rs 158.61 crore in FY19 to Rs 332.4 crore in FY20. Their balance sheet presently records losses up To Rs 540 crore as per the annualized figure.
Dunzo invested a significant amount on its riders making it the biggest factor in expenditure. This expense grew 2.2X from Rs 69.88 crore in FY19 to Rs 152.4 crore in FY20. The employee benefits expenses rose by 73% from Rs 42.2 crore to Rs 73 crore in FY20. Customer acquisition and discounted deliveries expenses increased by 2.7X from Rs 26.6 crore in previous year to Rs 72 crore in FY20.
Admin cost for the company also shot up 4.2X to Rs 83.74 crore in FY20 from Rs 20 crore in FY19 as Dunzo focused on achieving greater scale. The expenditures account for onboarding and support costs for riders and merchants as well as other direct costs like payment getaway charges and customer support cost.
Even though Covid-19 affected the company’s business by 25%, it also helped them generate organic leads. Biswas told that the consumers have started understanding the benefits without them having to teach them about it.