Hyperlocal supermarket and grocery startup Dunzo, which has been struggling to survive and raise funds, is likely to have ceased operations. The company’s app and website are no longer operational. While the defunct website shows ‘{“error”:”Something went wrong.”}’ message, the app says ‘unable to get new app configuration’.
The latest update on cash-strapped Dunzo, which as per data from Tracxn had reached to $744 million valuation in 2023 and raised $449 million in total equity funding, comes amid its co-founder Kabeer Biswas reportedly moving to e-commerce company Flipkart to lead its 10-minute delivery app Flipkart Minutes. Other co-founders including Mukund Jha, Dalvir Suri and Ankur Agarwal had earlier exited the company.
Backed by Reliance Retail and Google, which were among the largest shareholders in the company, Dunzo had reduced its operations and market presence in the past nearly two years due to challenges around raising growth capital along with cash burn, falling from its top position in India’s hyperlocal delivery market.
Reliance Retail held nearly 26 per cent stake while Google had a 20 per cent stake in Dunzo. Moreover, the company’s losses had also swelled to Rs 1,801 crore in FY23 from Rs 464 crore in FY22.
Financial difficulties seemingly plagued Dunzo over the past two years, leading to employee layoffs as well. The situation worsened when employees reportedly filed complaints regarding unpaid salaries.
Amidst these developments, Dunzo also sought potential buyers and it had reportedly approached Reliance Retail, Flipkart, and others for a possible acquisition. The combination of financial insolvency, operational disruptions, and leadership changes seemed to have culminated in Dunzo ceasing its services.
Further, intense market competition with aggressive expansion of rival companies like Swiggy Instamart, Blinkit, and Zepto put pressure on Dunzo’s market share. It also struggled to manage its high cash burn, a common challenge in the quick-commerce and hyperlocal delivery sector.