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Reliance Retail Writes Off ₹1,645 Crore Dunzo Investment After Cash Burn, Losses

Written by: Team Angel OneUpdated on: 8 Aug 2025, 7:34 pm IST
Reliance Retail writes off ₹1,645 crore investment in Dunzo as the startup posts ₹1,800 crore loss during FY23 and struggles with layoffs, delays.
Reliance Retail Writes Off ₹1,645 Crore Dunzo Investment After Cash Burn, Losses
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Reliance Retail has officially written off its ₹1,645 crore investment in hyperlocal delivery platform Dunzo, nearly 3 years after funding the company in an ambitious push into India’s quick commerce sector.

Reliance Retail Exits Investment After Startup's Collapse

In January 2022, Reliance Retail, along with co-investors including Lightbox, Lightrock, and Google India, led a $240 million (₹1,800 crore) funding round in Dunzo. Reliance Retail received a 26% stake and anticipated that Dunzo would power last-mile delivery for its JioMart and retail businesses. However, the startup's financials began deteriorating rapidly, culminating in its losses reaching ₹1,800 crore in FY23, nearly 4 times higher than the previous fiscal year, even as revenue rose to ₹226 crore.

Shifting Business Models and Management Changes

Dunzo, launched in 2014, initially served as a hyperlocal convenience brand. It later diversified into grocery delivery and then jumped into the quick commerce fray. Operational strain in this segment became apparent by early 2022 when the company reportedly lost ₹230 per order. Leadership instability followed, with co-founder and CEO Kabeer Biswas exiting in late 2023 to join Flipkart’s new quick commerce vertical, Minutes.

Employee Layoffs and Cost Challenges

Massive layoffs and cash concerns further impacted the business. By August 2023, Dunzo had let go of 150 staff, with only 50 left in critical teams. Despite hopes of raising $22-25 million in equity and debt, the funding never materialised. Salaries and vendor payments were delayed, leading to internal discontent as the company’s liabilities mounted.

Read More: Reliance Aims for Long-Term Value with 4 Strategic Growth Engines: Mukesh Ambani!

Investor Breakdown and Ownership Changes

After Reliance Retail, Google India held the second-highest stake at 19.3%, followed by Lightbox at 10%. The remaining shares were owned by other VCs and the founding team. Dunzo continued limited operations under Dunzo 4 Business, a B2B logistics wing, but shut its consumer-facing grocery delivery service in 2023.

Conclusion

Reliance Retail’s decision to write off its ₹1,645 crore Dunzo investment reflects miscalculations in the high-burn quick commerce sector. Despite heavy early funding and strategic intentions, Dunzo’s rapid losses, management exits, and mounting liabilities signalled an unsustainable business path for the once-promising startup.

Disclaimer: This blog has been written exclusively for educational purposes. The securities or companies mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Investments in securities are subject to market risks. Read all related documents carefully before investing.

Published on: Aug 8, 2025, 1:31 PM IST

Team Angel One

Team Angel One is a group of experienced financial writers that deliver insightful articles on the stock market, IPO, economy, personal finance, commodities and related categories.

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