Reliance led a $240-million (about ₹1,800-crore) funding round in Dunzo in January 2022, alongside Lightbox, Lightrock, 3L Capital and Alteria Capital. Dunzo was Reliance Retail’s opportunity to enter the quick commerce race, an industry that is now expected to cross $60 billion by 2030.
The deal was expected to enable hyperlocal logistics for Reliance Retail’s retail outlets as well as strengthen the company’s omni-channel capabilities. Dunzo was also expected to help Reliance’s own JioMart network of merchants with last-mile delivery.
The write-off comes months after the firm’s co-founder and chief executive officer Kabeer Biswas stepped down from his role and joined e-commerce firm Flipkart to lead its recently formed quick commerce arm Minutes. The move left the cash-strapped startup’s investors looking for ways to settle its dues and find a way forward, Mint reported in January.
Read more: As Kabeer Biswas jumps to Flipkart, no resolution yet in sight for Dunzo
After Reliance Retail, Google India was the largest shareholder with 19.3% stake, followed by Lightbox at 10%. Blume Ventures, Lightrock, and the co-founders—Dalvir Suri, Mukund Jha, Ankur Agarwal, and Biswas—own the remaining stake.
Dunzo was founded in 2014 as a hyperlocal convenience platform for consumers and businesses. A few years later, it pivoted to delivering groceries, and eventually into the hyper-competitive quick-commerce space.
Since its inception, Dunzo has raised about $470 million from investors. But over the past two years, the startup has found itself in a tough spot after burning through the cash.
Layoffs and salary delays
After multiple rounds of layoffs and delayed salary payments, Dunzo laid off 150 employees in August last year, leaving it with just 50 employees in the supply and marketplace teams, Mint reported.
Read more: Dunzo could have been a Zepto. So why did it fail?
Dunzo also shut its grocery delivery business in 2023 but continued operating Dunzo 4 Business, a courier service for businesses. The company was also in talks to raise $22-25 million in a mix of equity and debt from a clutch of new and existing investors, which did not materialize.
Dunzo struggled to keep costs in control. Its quick-commerce business burned as much as ₹230 per order in the first half of 2022, according to an Entrackr report. In 2022-23, Dunzo posted a loss of ₹1,800 crore, nearly four times higher than in the previous year. Revenue, however, jumped fourfold to ₹226 crore.
In an email to employees in August last year, Biswas said the company was nearing a position where it could claw back profits to pay off its liabilities, including salaries of current and former employees and payments to its vendors. But that didn’t come through.
