Google Buys Stake in Dunzo

Google has picked up a significant minority stake in hyper-local concierge and delivery player Dunzo, its first direct investment in an Indian startup underlining how the global search giant is quietly getting into an investment mode in the country.

Google led a $12-million investment in the Bengaluru-based startup as part of its ‘Next Billion Users’ push, as it seeks to build an ecosystem in India across high-frequency hyper-local transactions as well as in the healthcare, financial services, and education sectors.

Google wants to build an ecosystem in India similar to those of Flipkart, Paytm-Alibaba and Amazon India, ecommerce giants that are investing significantly across food-delivery, grocery and local services.

The Dunzo deal comes after Google International quietly infused ₹1,204 crore in its main local unit, Google India, this year — its largest and only investment in the unit since 2008, when it infused ₹26 crore in it. The size of the latest infusion, previously unreported, underlines the company’s intent to spend more aggressively on Google India, which has been profitable for over a decade and yet not been aggressive on spending here.

Over the last few months, Google has been spending aggressively in India, offering discounts on its payments app, Tez, as well as on its hyper-local services aggregator, Areo. Experts see possible synergies linking the investment in Dunzo with Areo and Tez.

Dunzo, currently present only in Bengaluru, runs an assortment of errands for users, such as picking up food from restaurants and groceries from stores, or your mobile charger that you forgot at a friend’s place. Dunzo, initially launched on WhatsApp in 2015, handles 3,500-4,000 tasks a day.

Google’s investment in Dunzo was through Google Asia Pacific, and not through Google Capital, which has backed domestic startups including education technology firm Cuemath and automobile classifieds company Cardekho.

Dunzo plans to expand to half a dozen cities across India by the end of 2018, and to ramp up to 1,00,000 transactions a day by the end of 2018 from about 1,00,000 transactions a month now.

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