Deloitte Raises Doubt on Dunzo's Ability To Continue as 'Going Concern'
IANS 08 November 2023
Top consulting firm Deloitte, which audited the financial statements of cash-strapped Dunzo for FY22-23, has said that the start-up’s ability to operate as a ‘going concern’ is largely dependent on the availability of additional funding and improvement in operations.
Cash-strapped Dunzo posted a massive loss of Rs1,800 crore in FY22-23, a 288% increase from the previous year.
Going concern is an accounting term for a company that has the resources to continue making enough money to stay afloat for the foreseeable future.
"The group’s ability to continue as a going concern is significantly dependent on the availability of additional funding, and improvement in business operations. These events or conditions, along with other matters indicate that a material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern," Deloitte said in its report.
Dunzo said in media reports that it has scaled its operations since Deloitte filed its report.
"The audit report is from six months back and we've made significant developments since on business and funding. In FY23, our overall platform GMV crossed Rs 1,500 crore representing the true scale of our business," according to a company spokesperson.
"Our logistics/B2B vertical, which reached maturity, continued to be a strong revenue generator, growing by over 128 per cent while becoming GM neutral," the spokesperson added.
Moneycontrol was first to report on the development. For Dunzo, revenue from operations surged 4.1x to Rs226 crore in FY22-23 from Rs54 crore in FY21-22..
Dunzo's losses came at a time when the company had been hit by the departure of several top-level executives, including co-founders and its finance head, as well as delays in salaries of several employees and mass layoffs across phases.
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