Updated February 22nd, 2024 at 21:45 IST

Flipkart looking to buy Reliance-backed Dunzo: Report

The company saw the exit of two founders amid layoffs, salary delays and cash concerns

Reported by: Business Desk
Dunzo defers payments again | Image:Dunzo/Facebook
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Takeover trouble: Flipkart is in talks with quickcommerce platform Dunzo for acquiring the entity, according to reports.

Dunzo was founded in 2015 as a quick-commerce player, its most recent competitors in the space being Blinkit, Swiggy Instamart and Zepto.

The discussions will likely be affected by the ownership structure of Dunzo, TechCrunch reported citing two people familiar with the matter.

Reliance has the largest stake in Dunzo at 26 per cent, while Google has a 19 per cent stake in the company. Other investors in Dunzo include Lightbox, Lightrock and Blume Ventures.    

Reliance has not approved the deal yet, as per the sources.

Dunzo has denied any conversation with any player for an acquisition of the business, Reuters reported.

Flipkart and Walmart also did not respond to Reuters' requests for comment.

Dunzo has raised $500 million from its investors, but soon laid off half, or 500 of its employees. 

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Walmart-backed Flipkart is not sure what would come under their ambit after the acquisition, since Dunzo has several IP relationships with Reliance Retail.

What draws Flipkart to the acquisition of Dunzo, which was popular until immense cash burn carried out during the IPL, is its B2B offerings.

Dunzo has also held talks with multiple companies for an acquisition, including Tata and Zomato, as per the report.

The shopping trends scenario and these ongoing conversations reflect about instant delivery companies losing prospects to a post-pandemic world order. 
The model worked when the world was at home, with the superfast model of companies doing better than Amazon Fresh, BigBasket’s BBDaily or JioMart, which would deliver same-day or the next day. 

Dunzo, which had invested $100 million in dark stores across several Indian cities, went on to shut them for supermarket partnerships after the decline in instant and home shopping trends. Even as Zepto was one of the unicorns of 2023 - instant delivery businesses have not been able to explore strong unit economics for their business across markets.

Dunzo was looking to raise $50 million last year, but it remains unclear if that round materialised, as per TechCrunch.

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The last round Dunzo has raised is Series F, according to data platform Tracxn.

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Published February 22nd, 2024 at 21:45 IST