Dunzo: Delivery reimagined?
Business
DUNZO /dʌn ZOH/
Done, finished.
Let's just dunzo the mixers for tonight's party?
In 2014, Dunzo founder Kabeer Biswas realized that he had a lot of chores to finish. He figured there were others like him. Dunzo was born out of Kabeer simply Whatsapping his friends, asking them if they needed anything done. Soon his WhatsApp contact started floating around, and he got flooded with requests to deliver food, medicines or even party supplies!
6 years hence, Dunzo has raised a total of $160M, backed by investors such as Google and Blume Ventures (Ola, Unacademy).
The Dunzo business model
Dunzo is a hyperlocal delivery startup, that delivers anything* to the end-user.
Dunzo makes money from 3 major sources:
Commissions from registered merchants
Commissions paid by registered delivery partners
Delivery charges paid by the customer
Dunzo has lately started adding restaurants, clothing stores as well as many general stores to its platform.
Hyperlocal delivery is no novel idea, and it is typically a low-margin business. So what rocketed Dunzo to success? Well, in 2020, COVID-19 happened.
*anything, within legal bounds, duh!
Riding the COVID wave
Dunzo reported solid revenue growth of 66.5% in FY'20-'21 over the year before.
What really worked out for Dunzo?
The startup has extensive connections with local merchants, that it had been building since 2015
Lockdown ensured that consumers turned to delivery companies to get the essentials
However, most important to Dunzo's success was a fundamental shift in consumer behaviour - the realization that one need not go out for grocery shopping, even after restrictions were lifted.
Reports suggest that customers were willing to pay an average of INR 44 for express e-commerce deliveries.
But, what about profitability?
Dunzo's FY21 EBITDA stood at an abysmal negative 425.3%. Although this number looks alarming - Dunzo is on the right track. The following YOY (FY'21) numbers are testament to improving economics:
Revenue grew ~67%
Expenses reduced ~ 27%
Total Losses reduced ~33%
At the company's current trajectory, it is expected to turn profits at least 2 years from now.
Funding games
Reliance Jio is in talks with Dunzo to participate in its Series E funding of $200M-$250M on a $800M valuation.
With recent talks with the Tata Group coming to a stall over deal terms, being backed by Reliance will give Dunzo a major boost in it's fight against Swiggy.
With Dunzo under its belt, Reliance will be able to play the e-commerce game, along with established players like Amazon, Flipkart, BigBasket and Grofers.
Dunzo currently has a valuation of ~$300M. Reliance Jio's infusion of funds is reported to see the valuation jump to $800M.
Dunzo's current investors include the likes of Google, Aspada ventures, Lightbox and The Times Group.
Some challenges?
Delivery companies have recently come under the microscope for unfavourable working conditions.
Dunzo, in a recent move to improve cash burn, slashed its payments to drivers. Moreover, Dunzo does not take any responsibility should your delivery go away - it is left up to the customer to sort out the problem.
This not only hurts customers but marginalizes the delivery partners. A successful hyperlocal delivery model rests on the delivery partner network - Dunzo needs to ensure it has delivery partners interests in mind.
Why would humans require pig kidneys?
Health
For the first time ever, surgeons at N.Y.U. Langone Health transplanted a pig kidney to a brain-dead human - and it worked!
While results were tracked for a period of just 54 hours, and many questions still remain unanswered, researchers have called this “a huge breakthrough”.
A pressing question to be asked here is - why do we need pig kidneys? And more importantly, what’s so wrong with the existing human organ transplants?
Organ transplantation issues
Organ transplantation is a complex procedure. Research here isn’t just limited to transferring an organ from Body A to Body B, but also to growing (i.e genetically engineering) an organ from scratch.
This is partly due to the technical challenges involved in transplants, for example - finding an ‘organ match’ for a body in a time crunch. ‘Matching’ varies across patient body types and is highly dependent on factors like similarities in blood type, body size and ‘markers’ on cells called human Leukocyte Antigens.
And added to all this hassle is the organ donor shortage.
Organ donor shortage
According to the US times, more than 100,000 Americans are currently on transplant waiting lists, and about 90% of them need a kidney. On average, 12 people on the waiting lists die each day.
The figures in India aren’t very encouraging either. According to the Organ Retrieval Banking Organisation (ORBO), against an annual need of about 1.5 to 2 lakh kidney transplants, only about 8,000 transplants take place.
Only a meagre 0.65 per million of our population are registered organ donors - That’s 6 in every 10 lakh people!
The transplantation complications
Even if one does manage to find an organ, transplants are very time-sensitive. Not being hooked up to oxygen, cells in the organs undergo anaerobic processes and eventually wither and die. Even in the best cold storage conditions, organs last at an average of only 4-6 hours, with kidneys lasting upto a day at maximum.
And it doesn’t end here - even after someone is sent home with a human organ, there are high chances of its rejection by the body. That’s essentially because the replaced organs are filled with foreign objects, and the recipient's immune system attacks the new organ as if it's a microbe.
To prevent rejection, doctors prescribe patients a bunch of ‘immunosuppressants’, which as the name suggests suppresses one’s immune system so that it won’t act as a threat to the new organ.
But this medication could also lead to the patient becoming very sick easily, and lead to a lifestyle change of strict medication regimens.
Roughly 20% of transplant failures occurred when patients missed their medications even for a day.
‘What if we genetically modify organs so they won’t fail in a new body’?
This brings into picture ‘Xenotransplantation’ - growing an entire organ in a non-human animal and then giving it to a human recipient.
Xenotransplantation isn’t new, and small bits of organ replacements from animals, like heart-valves, have already happened for decades.
But this event was the first time doctors were able to successfully ‘xenotransplant’ a whole kidney genetically engineered inside a pig, into a human.
How did they do it?
The reason why pigs were chosen for the project was simple - their kidneys are the same size as ours and are relatively easier to modify.
A kidney from the genetically engineered pig was attached to the patient’s upper leg, outside the abdomen. The doctors suggested that the fact that the organ functioned outside the body is a strong indication that it will work inside as well.
A future of pig kidneys?
“ The need for organs will always exceed the supply. If human organs are imagined as the fossil fuels of the organ supply, then pig organs are the wind and solar — sustainable and unlimited,” said Dr. Montgomery.
While this was a ‘watershed moment’, however studies for a longer duration are needed to fully understand the compatibility in the long run.
Doctors involved in the process are confident of moving to living human trials, seeing a pig to living human kidney transplant within a couple of years, and organs like heart, lung, and liver transplants in the next decade.
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