Dunzo co-founder Mukund Jha plans to start his own AI company, seeks to raise up to Rs 80 crore from Together Fund

Back in November 2022, when ChatGPT was launched for the public, interest around generative AI reached new heights. The AI chatbot’s ability to respond to questions in a manner as if a human being was talking left many people surprised as well as awestruck. Soon, AI became a buzzword in the tech industry and investors started pouring funds heavily into AI companies.

Dunzo co-founder staring his AI company

In May, an Economic Times report based on insights from market research firm Tracxn said that AI startups in India have already raised USD 91.7 million in funding so far this year, which is a significant increase from USD 29.6 million during the same period last year. And now, former Dunzo chief Mukund Jha is reportedly looking forward to start his own AI company.

A Moneycontrol report citing sources said that Jha is in discussions to raise between Rs 50-80 crore (approximately $6-10 million) from Together Fund for his new venture. This comes after Jha stepped down from the board of the cash-strapped startup Dunzo last year.

Jha's new venture reportedly focuses on generative artificial intelligence (Gen AI) and aims to automate quality assurance (QA) processes. "Think of it as a blend of AI and SaaS," an insider told Moneycontrol. QA involves creating and running tests, identifying errors, and providing feedback to ensure products meet quality standards.

What happened with Dunzo?

The delivery startup Dunzo delivers essential goods like groceries, household items, fruits and vegetables, pet supplies, pharmaceuticals etc to people locally. Supported by Reliance Retail, the startup has faced strong competition from companies like Zepto, Swiggy, and BlinkIt. Despite raising around $500 million, Dunzo has struggled to secure additional investment and manage payroll. In February, there were rumors that Flipkart might acquire the platform, but there have been no updates on this matter since.

Dunzo, on the other hand, was making headlines earlier this year for facing various financial struggles. The company’s top investor Lightbox also exited in May this year.

On the other hand, the company is reportedly experiencing a cash crunch and owes approximately Rs 11.4 crore to various vendors, including Google India, Nilenso, Clover Ventures, Facebook India, Cupshup, Koo, and Glance.

About Together Fund

Together Fund, from which Jha is reportedly going to raise funds for his new venture, has invested in over 20 companies across various SaaS sectors, including recruitment, sales intelligence, marketing, healthcare, and cloud solutions for connected devices.

“Our areas of focus span across SaaS, enterprise software, developer tools, open source software, cloud-native infrastructure and API-first businesses. We typically invest early (seed, pre A or series A) to help founders through the crucial zero-to-one part of their journey,” the company’s website reads.

Together Fund was founded in 2021 by Girish Mathrubootham of Freshworks, Manav Garg of Eka Software, and Shubham Gupta formerly of Matrix Partners India. It initially raised USD 85 million for its first fund and increased the total to USD 150 million with its second fund announced in 2023