After two years of financial struggles and Dunzo’s exit from the quick commerce space, Reliance Retail, the largest shareholder, has written off its $200 million investment in the startup. Reliance is no longer participating in any discussions to either inject more funds into the company or acquire it. In parallel, Kabeer Biswas, Dunzo’s CEO and cofounder, is negotiating with high-net-worth individuals and family offices to sell the company for a substantially lower valuation of INR 300 Cr ($25-$30 million).
Dunzo’s Struggles: Valuation Drop, Financial Woes, and Failed Acquisition Talks
The proposed valuation marks a dramatic decline from Dunzo’s previous $770 million valuation during its last funding round, when Reliance made a significant investment. Biswas has also reached out to other potential buyers such as Flipkart, Swiggy, Tata Group, and Zomato, but has yet to finalize any deal. In 2023, the departure of senior Reliance executives, along with representatives from other investors like Lightrock and Lightbox, from Dunzo’s board highlighted the worsening relationship.
Dunzo’s difficulties began in early 2022 when it was unable to leverage the quick commerce boom. Despite Reliance’s strategic investment, designed to build synergies with JioMart and its retail network, Dunzo struggled to compete with new entrants like Zepto. By FY23, the company’s losses had tripled to INR 1,801 Cr, worsening its cash flow problems, delaying salary payments, and leading to unpaid vendor dues.
Dunzo Cuts Delivery Times, Secures Funding, and Faces Debt Amid Acquisition Talks
To cut costs, the company has moved from 15-20 minute deliveries to 60-minute deliveries and secured $6.2 million in debt funding. Despite this, Dunzo’s debt remains significant, including INR 80 Cr in unpaid vendor and tax dues. Biswas aims to settle these debts if the company is sold. Additionally, reports indicate that Biswas is contemplating stepping down once a potential acquisition deal is finalized.
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