Dunzo: Reliance Paid $200 Million. Three Years Later It Was Written Off

Story summary

The story

The short version

Dunzo started in Bengaluru in 2014 as an app that would run your errands: pick up a parcel, deliver groceries, collect your keys from a friend. It became one of the best known apps in the city. In January 2022 Reliance Retail, part of India's largest company, invested $200 million for a 25.8 percent stake.

By 2025 the app had gone offline, its founders had left, and Reliance had written off its entire investment. In September 2025 a tribunal admitted Dunzo into insolvency.

If this sounds familiar, it should. Munshi told a similar story about Pakistan's Airlift. The ledger is almost the same.

Why Reliance bought in

In 2021 and 2022 quick commerce was the hottest idea in Indian retail. The promise was groceries at your door in 10 to 20 minutes, from small warehouses close to customers, the same "dark store" model Airlift used in Pakistan. Blinkit, Zepto and Swiggy's Instamart all raced to build networks.

Dunzo had a strong brand in Bengaluru and an early lead. Reliance had money, suppliers and a national store network. Together they planned to move fast. In total Dunzo raised close to $485 million from investors over its life, Inc42 reported.

Read the ledger

Dunzo's own filings, reported by Entrackr, show what speed cost.

In FY22, Dunzo earned Rs54 crore in revenue and lost Rs464 crore. In FY23 revenue grew more than four times to Rs226 crore. The loss grew almost four times too, to Rs1,801 crore. Total spending in FY23 was Rs2,054 crore.

Put another way, Dunzo spent about Rs9 for every Rs1 of revenue it earned. Delivery partners' fees alone were Rs367 crore, far more than all of its revenue.

That is the same crack Munshi found in Airlift. When a delivery company grows by selling more orders that each lose money, growth does not fix the problem. It multiplies it.

The money stops

In April 2023 Dunzo raised $75 million more, at a valuation of about $744 million after the new money, according to Tracxn data cited by YourStory. It would be its last round.

Within months, the cracks became public. In July 2023 Dunzo received legal notices from at least seven companies over unpaid dues. It struggled to pay salaries for months and cut staff. Meanwhile Blinkit, Zepto and Instamart kept expanding with deeper pockets.

Talks to sell the business to Swiggy and to BigBasket fell through, YourStory reported. Co founders left one by one. By January 2025 the app had gone offline, chief executive Kabeer Biswas had resigned, and Reliance had written off its $200 million investment.

In September 2025 the Bengaluru bench of India's National Company Law Tribunal admitted Dunzo into insolvency on a petition from a vendor, Exotel, and appointed an interim resolution professional.

Why rivals survived

It is fair to ask why Blinkit, Zepto and Instamart kept going when Dunzo did not. All of them lost money building quick commerce. The difference was how long each could afford to keep losing. Rivals backed by large listed parents, or able to raise fresh money, could wait for order sizes and density to improve. Dunzo ran out of time first, in a market where the cost of each order was high and its funding stopped.

What the ledger teaches

A famous investor does not make a business model work. Reliance's money bought Dunzo time, but each order still cost more to deliver than it earned. When the funding market cooled, the bill came due.

Airlift and Dunzo were in different countries, with different founders and investors. They failed in the same way. The lesson for the next quick commerce startup in Karachi, Lahore or Dhaka is simple: count the cost of one order before counting the number of orders.

Questions to ask about any quick delivery app

• Does a single order make money after rider pay, discounts and rent?
• How much does it spend for every rupee of revenue?
• Are bigger rivals willing to lose money for longer?
• If funding stopped tomorrow, how many months could it last?

Read the Airlift story: Airlift: The $85 Million Startup That Lasted 11 Months

The ledger

Munshi's noteSpeed is a promise you pay for on every order. If the order does not cover the cost of the promise, growth only makes the hole deeper.

Sources

1. Entrackr, November 2023Dunzo posts Rs 1,800 cr loss, Rs 226 cr revenue in FY23
2. YourStory, January 2025Reliance Retail writes off $200M investment in Dunzo amid financial struggles
3. YourStory, January 2025Dunzo goes offline as investors, co-founder depart
4. YourStory, August 2025Reliance writes off its $200M investment in Dunzo
5. Inc42, 4 September 2025Reliance-backed Dunzo admitted into insolvency

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