Friday, August 8, 2025

Reliance Retail Officially Writes Off Its $200 Mn Investment in Dunzo Made in 2022

Date:

Reliance Industries has officially taken a complete write-off on its ₹1,645 crore (about $200 million) investment in Dunzo, the Bengaluru-based quick commerce startup. This stake, acquired through Reliance Retail Ventures in early 2022 for around 25.8%, is now worth nothing after Dunzo’s operations came to a halt. In January 2025, Dunzo’s app and website went offline, shortly after its last co-founder and CEO, Kabeer Biswas, left the company to head Flipkart Minutes.

Despite pumping in over $450 million in funding from big investors like Reliance Retail and Google, Dunzo struggled financially with repeated layoffs, unpaid employee salaries, and a shrinking business. Acquisition talks with companies like Flipkart and Swiggy fell apart, pushing Dunzo further toward closure.

Dunzo’s Journey: Rise and Fall in Quick Commerce
Dunzo grew rapidly by pioneering hyperlocal delivery services since 2014, expanding its offerings across groceries, medicines, food, and errands, supported by strong investor backing from Reliance Retail and Google. However, its downfall came due to operational inefficiencies, failure to build a robust dark store network, aggressive but costly marketing, and fierce competition from players like Blinkit, Zepto, and Instamart

Dunzo’s Financial Struggles Before Closure

Looking at Dunzo’s financials reveals the harsh reality of its business. While revenue grew to around ₹226 crore by FY23, losses skyrocketed to over ₹1,800 crore, showing extremely poor unit economics. The company’s aggressive expansion into quick commerce through Dunzo Daily increased monthly costs beyond ₹100 crore. Massive marketing spends, including IPL sponsorships, and the absence of a large dark store network meant high delivery costs. These factors drained cash and created mounting debts and unpaid bills, causing Dunzo’s promise of rapid deliveries to fall apart — from 15 minutes to nearly an unaffordable 60 minutes.

Failed Fundraising and Acquisition Efforts Weaken Investor Confidence

Dunzo’s financial woes deepened in 2023, culminating in a collapsed deal with PhonePe for its merchant operations amid concerns over Walmart’s involvement. Flipkart’s proposed acquisition also stalled after investors pushed back. Reliance Retail declined to inject more funds, forcing Dunzo to attempt a rights issue at a heavily discounted valuation.

By early 2025, key investors had exited, destabilizing the company’s leadership. Reliance Retail withdrew from further funding or acquisition talks. Meanwhile, CEO Kabeer Biswas sought acquisition conversations with family offices, offering valuations slashed to ₹300 crore ($25–30 million), a far cry from the $745 million valuation when Reliance invested.

Dunzo’s Write-Off Highlights Tough Reality in Quick Commerce

Dunzo’s shutdown and Reliance’s full write-off underline the brutal realities and cutthroat competition within India’s quick commerce sector. Competitors like Blinkit, Zepto, and Instamart have secured deeper funding, built more efficient dark store networks, and delivered better unit economics. Dunzo’s fall is a reminder of the challenges in executing rapid delivery models profitably amid intense rivalry.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Share post:

Popular

Articles
Related

Zepto Enters 10-Minute Medicine Delivery with Zepto Pharmacy — Now Live in 4 Cities

Zepto, the fast-growing quick-commerce startup, just announced an exciting...

This 7-Year-Old Cosmetics Brand Crosses $200 Mn Valuation After Raising $30 Mn in Fresh Funding

Indian beauty brand RENÉE Cosmetics recently raised ₹263 crore...

Is UPI no longer free? ICICI Bank has started charging transaction fees to UPI apps.

India’s digital payment system UPI (Unified Payments Interface) reached...

Chinese investor Ant Group exits Zomato’s parent with a remarkable 500% return. Check full details.

Ant Financial, a part of Alibaba Group, has officially...