November 2024: it was a cool evening in Delhi, when the general partner of a Bengaluru VC firm frantically sought help to get a pizza from Leo’s delivered from one corner of the city to another.
It was an order that neither Zomato nor Swiggy could fulfil, so the VC turned to Borzo for help, finally receiving the order and carrying the pizzas back to Bengaluru on a night flight.
But before that happened, I asked him — what about Dunzo?
It was a tongue-in-cheek suggestion meant to evoke some kind of banter — this being a Bengaluru VC in Delhi. Besides, this is exactly what Dunzo
did for years. But all I got was a smirk and waving of the hands: “Dunzo is done, bro!” said the curly-haired VC.
There’s no denying Dunzo’s journey has been remarkable, even if things have not gone as planned. So this Sunday, we see how Dunzo lost its edge and magic. And what next for founder Kabeer Biswas and employees left waiting for their final dues?
But after a look at the top stories from our newsroom this week:
- Netradyne’s Unicorn Run: India’s first unicorn startup of 2025 is looking to develop its own foundational models for its AI-powered fleet safety and video telematics solutions after raising $90 Mn in its Series D this week
- India’s AI Framework: In light of the Draft AI Guidelines, India’s AI industry stakeholders are cautiously optimistic, even as some worry that heavyhanded policy might end up stifling innovation. Here’s our deep dive into what the guidelines mean and what startups are saying
- Startups Eye Mahakumbh Gold: Mahakumbh 2025 is big business for startups, especially the burgeoning spiritual tech segment, which is looking to capitalise on a potential $1 Bn opportunity at the holy gathering over the next month
Dunzo: From Delivery To Disaster
Some companies become bywords for their businesses — it’s usually a mark of success and brand equity. For years, Dunzo was considered a verb for hyperlocal deliveries, but today, it’s a mere shell of its former self.
The company reached a valuation of $744 Mn, but it grew its cult on the basis of word-of-mouth referrals and customer success when it launched way back in 2014. At that time, Amazon and Flipkart weren’t even thinking of quick deliveries — they didn’t care about bringing retailers online, but Dunzo did, and built a strong base of loyal customers in Bengaluru who swore by the service.
It also expanded to other cities such as Pune, Mumbai and Delhi gradually, creating a big buzz in all these markets as the only player offering hyperlocal deliveries.
In fact, quick commerce was not even coined, and Dunzo was delivering groceries and cigarettes in a matter of minutes before the pandemic. If anything, Dunzo gave everyone a taste of what Instamart, Blinkit and Zepto later offered.
It was on the shoulders of Dunzo that these giants created their playbooks to some extent. But as we have recounted several times in the past two years, the emergence of quick commerce as a category somehow created a panic within Dunzo. Even Reliance infusing $200 Mn into the company could not save it.
Despite many firsts to its credit and having raised nearly $450 Mn over its lifetime, Dunzo has struggled to stay afloat, is struggling to find a buyer and has left hundreds of employees and several vendors disgruntled over non-payment of dues.
CEO and cofounder Kabeer Biswas, has reportedly moved on to Flipkart Minutes, but is dealing with legal challenges from vendors and employees. The former have moved the NCLT to initiate insolvency proceedings against the company, while employees have filed police complaints against Biswas due to unpaid salaries.
Sources say that the startup has carried out as many as 12 rounds of layoffs in its entire lifetime, with most of the layoffs happening since 2022.
With over $70 Mn in financial liabilities, Dunzo’s potential sale looks impossible, several industry sources told us. “Unlike in 2021-2022, a business like Dunzo today can be built within a week. There is literally no distinction between the quick commerce businesses but their execution. Dunzo has majorly failed in its execution and missed the bus,” an industry player and a third party vendor with Dunzo told us.
The Gloom After The Golden Years
Even before Dunzo, Kabeer Biswas had earned his entrepreneurial stripes with Hopper, a startup he sold to Hike before setting off on a new adventure.
Biswas, along with his friends Mukund Jha, Dalveer Suri and Ankur Agarwal, floated a WhatsApp group to organise and aggregate hyperlocal deliveries from retailers in select areas of Bengaluru.
This was when the CEO met Dunzo’s first investor Lightrock and its partner Sahil Kinney. Incidentally, this was also when India’s hyperlocal ecosystem was booming. Dozens of hyperlocal startups mushroomed up between 2015 and 2016, but no one survived the hype cycle like Dunzo.
By 2018, its model was unique in the Indian startup ecosystem, but after the pandemic, the likes of Zomato and Swiggy tried to ape Dunzo to deliver essentials. This was the precursor for the quick commerce wave that soon followed.
Between 2015 and 2022, Dunzo raised funds from the likes of Google, Lightrock, Lightbox, Alteria Capital, and of course, Reliance. Overall, Dunzo secured more than $450 Mn from equity and debt investors.
This despite the company not showing the kind of revenue growth that should be expected of a startup that has raised millions in funding.
In fact, Dunzo’s consolidated loss in FY22 widened 2X from FY21 to INR 464 Cr and total revenue stood at INR 67.7 Cr. And the losses only ballooned the next year (April 2022 to March 2023). The Bengaluru-based hyperlocal delivery startup’s loss surged to a staggering INR 1,801 Cr, but operating revenue only increased to INR 226.6 Cr.
The company has not filed audited financials for FY24, but it’s hard to imagine the financial situation improving after the downturn of 2023.
It was during the FY23 period that Dunzo made a big push for quick commerce with Dunzo Daily. It was not a mistake by any stretch of the imagination, but scaling up quick commerce and maintaining presence with local retailers was a hard balance even for Dunzo.
Quick commerce — as evidenced by Zepto, Instamart and Blinkit — requires a singular focus, feet on the ground and more than enough traction to attract further capital infusion.
Dunzo on its part set up dark stores in Bengaluru, Delhi NCR and Mumbai and hired workforce for these stores and for delivery, and also started acquiring inventories from retailers. For the first few months everything was going fine.
Dunzo Daily kept pace with Instamart and Blinkit on delivery time, and was keeping up with the SKU build up. But scaling this up proved a bridge too far for Biswas and Co.
A partner at a Bengaluru-based VC firm and Dunzo investor told us, “The difference was that Zomato kept infusing money into Blinkit, Swiggy raised a billion dollars, Zepto convinced investors that it will play 15-minutes delivery in the long term. As for Dunzo, it offered quick deliveries, but was never among the top three players.”
The Reliance Factor
A senior industry player quoted above in the story mentioned that Reliance tried to add B2B deliveries to Dunzo’s bucket and pushed for JioMart partnerships, but this did not prove enough to keep the B2C operations going.
There was just not enough gas in the tank for Dunzo to accelerate. “The inability to scale its revenue in comparison to a much younger rival like Zepto in FY22 and FY23 cornered Dunzo. Reliance really doesn’t like to be the fourth or fifth player in any industry and its Dunzo bet did not pay off at all. It also made it difficult for the company to raise funds at a lower valuation,” a former Dunzo senior executive told us.
Sources added that Reliance had at one point offered to acquire Dunzo, but Biswas was not willing to exit at that point. In fact, most observers would agree that Biswas tried everything to keep the operations going even as other cofounders departed the company.
Cofounders Suri and Jha left at a crucial time, leaving Biswas to man the fort even as it seemed to be crumbling. One does wonder whether Biswas skipped a beat by turning down acquisition offers from Reliance and others, including Flipkart in 2024, as per reports.
Even before their departure, it was clear that besides Biswas, the other founders were left with very little equity in the company after diluting their stake over the years.
After infusing $200 Mn in the company, Reliance held more than 25% stake in the company, and Google owned close to 19%.
The next biggest investor was Lightbox which held 12%, while early investor Lightrock held 3.86% stake in Dunzo after the last round. That might seem small, but the three founders held a mere 3.95% stake in the company after that massive $250 Mn round, with Biswas himself owning about 3.6% equity.
Dunzo had the right idea — after all, the rise of Zepto, Blinkit and Instamart and the Cambrian explosion of quick commerce startups in 2024 is a validation of the business model.
But it failed in execution, even though it had a marked advantage when Covid hit. It was the only scaled up player on the ground for hyperlocal deliveries, but this first mover advantage was squandered.
If you ask any of the quick commerce platforms, the focus has been on growth and not profits. So Dunzo was not the only player to not have solid unit economics, but it failed to show the kind of progress on growth either that the likes of Zepto displayed.
Continuous investments are necessary in quick commerce today for customer acquisitions and engagement, adding to the SKU capacity and bolstering product assortment beyond groceries. Dunzo didn’t survive long enough in the game to come to this point in evolution.
Where To, From Here?
Even till the very end, Biswas held faith that things can be turned around. But with Dunzo’s website going down this week (and coming back up days later), the writing seems to be on the wall.
Employees are naturally irate over the situation after not receiving salaries for more than a year.
“Kabeer assured employees that he is trying to stitch together a funding round and this requires investors’ approval. This went on for nearly a year. Many employees quit on their own and there were also multiple rounds of layoffs. Talks with Flipkart were on for a long time, until we heard one day Kabeer is moving to join Flipkart Minutes. He stopped communicating with the employees towards the end of 2024,” a former employee who recently quit the company said.
Even as Biswas remains mum on the fate of Dunzo and whether he has indeed joined Flipkart Minutes, employees have lost patience and taken their complaints to the police.
Biswas happens to be one of the directors on the Dunzo board along with Hong Jin Kim, the managing director at South Korean firm STIC Investments. This makes the CEO accountable for fiduciary lapses, especially the non-payment of statutory taxes.
“It is hard to imagine Dunzo without Biswas. With him quitting the company, the revival looks bleak. It is an unfortunate saga of how we lost an iconic brand. Another case of investor-founder friction after the founders gave up their majority stakes and expanded too soon without a plan for the future,” the investor quoted above told us.
According to industry sources, the best Reliance can do now is acquire the Dunzo brand, which still has some lingering value left among the ashes of the former giant. “The tech stack is a non-entity in today’s world where open source protocols are available and APIs can be built in no time. However, Dunzo’s user data in major cities could interest Reliance for its own ecommerce ambitions,” an industry analyst said.
There is also a remote possibility of Biswas convincing Flipkart Minutes to acquire Dunzo for a $10 Mn to $20 Mn deal in order to save his legacy. However, this would require Reliance as well as Walmart’s approval, which seems unlikely to come any time soon.
Which is why it’s looking like Dunzo is done, indeed.
Sunday Roundup: Tech Stocks, Startup Funding & More
- Blinkit Arms Up: Zomato has infused around INR 500 Cr (about $57.7 Mn) in Blinkit as the quick commerce vertical looks to expand its service base and category assortment.
- OYO’S Secondary Deal: Early backers of OYO, including Lightspeed Venture Partners, are reportedly in talks to sell a portion of their stake in a secondary sale likely to value the IPO-bound company at $3.9 Bn
- Policybazaar Dips: Shares of PB Fintech settled at INR 1,725.55 after falling as much as 6% on Friday, days after the company’s offices were raised by GST authorities
- Deeptech Fund: Speaking at the Startup Policy Forum’s inaugural event, former NITI Aayog CEO Amitabh Kant has called for a deeptech-focussed fund of funds (FoF) for startups
