Reliance Retail took a decisive step in 2025 when it wrote off its entire ₹1,645 crore investment in Dunzo. That equals about USD 200 million. The move counts as one of the largest startup write-offs in India in recent years. Reliance made this investment through its retail arm in early 2022 and took a 25.8 percent stake in the hyperlocal delivery startup. Dunzo at that time promised rapid growth, but the company collapsed within three years.
Reliance’s Bet on Dunzo
In January 2022, Reliance Retail led a massive funding round for Dunzo. The company invested USD 200 million, aiming to combine Dunzo’s strong last-mile delivery network with Reliance’s retail ecosystem. Dunzo’s business revolved around delivering groceries, household items, and other essentials within minutes, a model that seemed to fit perfectly with Reliance’s JioMart expansion plans.
Reliance executives believed Dunzo could help capture the growing market for quick commerce. Competitors like Blinkit, Swiggy’s Instamart, and Zepto were racing ahead, but Reliance saw Dunzo as a partner that could close the gap quickly. The funding round also brought in major names like Google, which boosted confidence in the company’s future.
Dunzo’s Rise and the Quick Commerce Boom
The quick commerce industry in India witnessed explosive growth during the pandemic. Consumers wanted groceries and essentials delivered in 10 to 20 minutes. Companies poured billions into building this infrastructure. Dunzo, already active in hyperlocal deliveries, decided to pivot aggressively into this space with its “Dunzo Daily” service.
The company expanded warehouses, recruited delivery staff at a rapid pace, and offered deep discounts to capture customers. Reliance’s backing gave Dunzo a strong war chest, and the startup raised more than USD 450 million in total from various investors.
For a brief period, Dunzo gained traction in major cities and positioned itself as a serious challenger to the market leaders. The brand became associated with convenience, speed, and a vibrant, youthful image.
Cracks in the Model
By mid-2023, the quick commerce boom began to show cracks. Dunzo’s cost of operations soared. The discounts and promotional offers that attracted customers drained cash. The cost of maintaining dark stores, paying delivery partners, and competing on delivery times ate into the margins.
The company’s losses surged. In FY 2022, Dunzo recorded losses of around ₹464 crore. In FY 2023, the losses jumped to ₹1,801 crore. Revenue growth failed to match the pace of spending. Investors grew concerned about the burn rate and the lack of a clear path to profitability.
Competitors with deeper pockets, like Blinkit backed by Zomato, Swiggy’s Instamart, and Zepto, moved faster, expanded their coverage areas, and optimized their operations. Dunzo struggled to match the scale and efficiency of these rivals.
Leadership Turmoil
Leadership changes added to the uncertainty. In late 2023, co-founders Mukund Jha, Dalvir Suri, and Ankur Agarwal exited the company. CEO and co-founder Kabeer Biswas remained, but he faced mounting pressure to turn the company around.
The company delayed salaries, cut jobs, and reduced operations to a few areas in Bengaluru. Vendors and service providers complained about unpaid bills. Tax authorities pursued the company for overdue payments.
By early 2025, Kabeer Biswas decided to step down. He accepted a role at Flipkart’s quick commerce arm, Minutes. On January 13, 2025, Dunzo’s app and website went offline, marking the end of its operations.
Reliance Pulls Back
As Dunzo’s troubles deepened, Reliance reassessed its position. The company had already scaled back its involvement in strategic discussions. Senior Reliance executives resigned from Dunzo’s board in 2023.
Reliance explored possible rescue deals but chose not to inject more capital. By early 2025, Reliance decided to write off the entire ₹1,645 crore investment. The decision reflected the reality that Dunzo’s valuation had plummeted from USD 770 million in mid-2023 to barely ₹300 crore by early 2025.
Reliance concluded that recovering the investment was no longer possible and that further involvement would not deliver returns.
Failed Acquisition Talks
Before shutting down, Dunzo pursued acquisition talks with several potential buyers. Kabeer Biswas reached out to Flipkart, Swiggy, Zomato, and Tata’s BigBasket. He also approached wealthy individuals and family offices to buy the company at its reduced valuation.
None of these talks led to a deal. Potential buyers hesitated because of Dunzo’s heavy debt, operational liabilities, and limited geographic presence. Creditors filed cases with the National Company Law Tribunal to recover dues, adding another layer of complexity for any buyer.
Lessons from Dunzo’s Fall
Dunzo’s rise and fall offers important lessons for India’s quick commerce sector. The market demands huge upfront investment in infrastructure, technology, and marketing. But the margins remain thin, and customer loyalty is fickle when discounts disappear.
Speed and scale require deep capital reserves and tight operational control. Dunzo entered the quick commerce race with ambition but lacked the financial depth and execution speed of its larger rivals. The company also failed to adapt quickly enough when the market shifted from growth at any cost to a focus on profitability.
Reliance’s experience with Dunzo may influence its future investment strategy. The company can choose to develop its own quick commerce capabilities within JioMart rather than rely on external startups. Reliance already controls supply chains, warehouses, and retail outlets, which gives it a structural advantage in building an in-house solution.
Impact on the Startup Ecosystem
The collapse of Dunzo sends a cautionary message to both investors and entrepreneurs. Startups cannot rely solely on funding rounds and aggressive expansion to sustain themselves. Sustainable unit economics, disciplined spending, and strong operational management remain essential.
For investors, the Dunzo case shows that even high-profile backers and strong early growth cannot guarantee long-term success. The quick commerce space will likely see more consolidation as only the strongest players survive.
Conclusion
Reliance Retail’s write-off of its ₹1,645 crore investment in Dunzo marks the end of a partnership that once promised to reshape India’s delivery landscape. Dunzo started as a promising hyperlocal delivery app, evolved into an ambitious quick commerce player, and then collapsed under the weight of mounting losses, leadership exits, and unrelenting competition.
Reliance’s decision to walk away highlights the unforgiving nature of quick commerce. The sector rewards speed, scale, and efficiency—but punishes operational missteps and financial indiscipline. Dunzo’s story now serves as a case study for startups chasing rapid growth in highly competitive markets. It proves that in quick commerce, deep pockets and flawless execution matter as much as innovative ideas.
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