The strategic investments made by Reliance Industries (RIL) in several start-ups over the past few years have been broadly yielding results, with three of the prominent acquisitions posting net profits in FY23, compared with net losses made prior to the buys. However, the famous Midas touch of RIL is missing in one: in the case of Bengaluru-based online delivery platform Dunzo Digital, which continues to post losses.
In the recent past, RIL acquired stakes ranging from 25-85% in four bigger start-ups – Netmeds, Urban Ladder, Just Dial and Dunzo Digital – through its retail arm Reliance Retail Ventures (RRVL).
In August 2020, Reliance Retail acquired a majority stake in Chennai-based online pharmacy delivery startup Netmeds for Rs 620 crore in cash. Now RIL holds an 85.06% stake in Netmeds.
In FY21, the year of the acquisition, Netmeds posted a net profit of ₹1.05 crore and a net loss of ₹164.06 crore in the year ago period. Following RIL’s buy, its net profit rose to ₹10.58 crore in FY22 and then to ₹11.22 crore, a year after. The company’s revenues rose to ₹145.31 crore in FY23 from ₹110.13 crore in FY22, while in FY21 it stood at ₹134.23 crore. Prior to the deal, its revenue was at ₹37.26 crore, according to data sources from RIL’s website.
Ditto was the case in Urban Ladder, in which RIL invested in November that year for over ₹182 crore. The firm had posted net losses of ₹15.73 crore in FY21 (year of buy) and ₹6.11 crore in FY20. For FY22, Urban Ladder posted a net profit of ₹9.63 crore, which later rose to ₹27.07 crore in FY23, even though revenues fell to ₹193.08 crore in FY22 from ₹226.49 crore in the year-ago fiscal.
In case of Just Dial, which RIL acquired in July 2021 for ₹5,710 crore in all cash deal, the net profit zoomed to ₹162.92 crore in FY23 from ₹70.94 crore recorded during the year-ago period, while net revenues rose to ₹844.76 crore from ₹646.95 crore posted in FY22. For FY21, the company had posted a net profit of ₹214.19 crore, while that in FY20 was at ₹272.31 crore.
However, Dunzo Digital beats the trend with it posting a net loss of ₹462.30 crore for FY22, an increase from a net loss of ₹225.7 crore in FY21. While the data for FY23 is not available, it has posted a net loss of ₹338.40 crore in FY20. It posted net revenues of ₹54.30 crore in FY22, ₹45.80 crore in FY21 and ₹27.50 crore in FY20, while that of FY23 was not available.
RIL invested $200 million (about ₹1,488 crore) in Dunzo in January 2022 for a 25.8% stake on a fully diluted basis. Dunzo was to facilitate last mile deliveries for JioMart’s merchant network. The company continues to suffer from cash-flow issues and is reported to be seeking at least another $20 million more from Reliance Retail.Dunzo is also reportedly transitioning from a dark store-centric quick commerce business (that explains the spate of closures in the past few months) to bringing larger supermarkets and grocery stores on a revenue-sharing basis.