**Reliance Retail Writes Off ₹1,645 Crore Investment in Dunzo**
Reliance Retail has officially written off its investment of approximately ₹1,645 crore in the hyperlocal convenience startup Dunzo, as detailed in Reliance Industries’ FY25 annual report. This decision comes over three years after the conglomerate acquired a nearly 26% stake in the company.
In January 2022, Reliance spearheaded a $240 million (around ₹1,800 crore) funding round for Dunzo, alongside other investors such as Lightbox, Lightrock, 3L Capital, and Alteria Capital. The partnership was seen as a strategic move for Reliance Retail to enter the burgeoning quick commerce sector, which is projected to exceed $60 billion by 2030. The collaboration aimed to enhance hyperlocal logistics for Reliance Retail’s outlets and bolster its omni-channel capabilities, while also supporting the last-mile delivery for JioMart’s network of merchants.
The write-off follows the recent resignation of Dunzo’s co-founder and CEO, Kabeer Biswas, who has taken on a leadership role at Flipkart’s new quick commerce division, Minutes. This transition has left Dunzo’s investors seeking solutions to address the startup’s financial challenges, as reported earlier this year.
After Reliance Retail, Google India holds the second-largest stake in Dunzo at 19.3%, followed by Lightbox with 10%. The remaining shares are distributed among Blume Ventures, Lightrock, and Dunzo’s co-founders, including Dalvir Suri, Mukund Jha, Ankur Agarwal, and Biswas.
Founded in 2014, Dunzo initially served as a hyperlocal convenience platform before pivoting to grocery delivery and eventually entering the competitive quick-commerce market. To date, the startup has raised around $470 million from various investors. However, it has faced significant financial difficulties over the past two years, leading to multiple layoffs and delayed salary payments. In August of the previous year, Dunzo laid off 150 employees, leaving only 50 in its supply and marketplace teams.
In 2023, Dunzo ceased its grocery delivery operations but continues to run Dunzo 4 Business, a courier service for enterprises. The company was also in discussions to secure $22-25 million in a mix of equity and debt from new and existing investors, but these efforts did not come to fruition.
Dunzo has struggled to manage costs effectively, with its quick-commerce operations reportedly losing up to ₹230 per order in the first half of 2022. The company recorded a staggering loss of ₹1,800 crore for the fiscal year 2022-23, nearly quadrupling its losses from the previous year, despite a fourfold increase in revenue to ₹226 crore.
In an email to employees last August, Biswas expressed optimism that the company was approaching a point where it could regain profitability and address its outstanding liabilities, including salaries owed to current and former employees.
**FAQ**
**What led to Reliance Retail’s decision to write off its investment in Dunzo?**
Reliance Retail’s write-off of its investment in Dunzo was influenced by the startup’s financial struggles, including significant losses, layoffs, and the departure of its CEO, which raised concerns among investors about the company’s future viability.