Exclusive: Reliance-Backed Dunzo Admitted Into Insolvency

Reliance Retail Writes Off INR 1,645 Cr Investment In Dunzo

SUMMARY

Reliance-backed Dunzo has been admitted into insolvency by the Bengaluru bench of NCLT after petitions from vendors including Exotel and Velvin Packaging, with an IRP appointed to oversee the process.

Despite raising $485 Mn from marquee investors like Reliance and Google, Dunzo’s pivot to quick commerce failed, with FY23 losses swelling to INR 1,748 Cr against revenues of INR 206.5 Cr.

Successive cofounder exits, Reliance’s $240 Mn write-off, and over a dozen vendor notices for unpaid dues—adding up to nearly INR 80 Cr crore in liabilities—highlight how one of India’s earliest hyperlocal pioneers collapsed under competition and unsustainable burn

The Bengaluru bench of the National Company Law Tribunal (NCLT) has admitted an insolvency plea against Reliance-backed startup Dunzo. The plea has been filed by one of its vendors, Exotel Techcom Private Limited.

The NCLT bench admitted Dunzo to the Corporate Insolvency Resolution Process (CIRP) after an insolvency plea against the startup filed by another vendor, Velvin Packaging Solutions Pvt Ltd in September 2024.

“Under Section 9 of the I & B Code 2016 read with Rule 6 of the Insolvency & Bankruptcy (Application to Adjudicating Authority) Rules 2016 and IRP has been appointed. The petitioner herein can prefer its claim before IRP/RP on being notified,” according to the NCLT order in the matter of Exotel.

This comes nearly a month after Reliance Industries Ltd (RIL) wrote-off Reliance Retail’s $240 Mn investment into Dunzo.

Since its inception in 2015, Dunzo raised close to $485 Mn across multiple rounds from marquee backers including Reliance Retail, Google, Lightbox, Blume Ventures, Aspada, STIC, and Lightrock.

Its biggest boost came in January 2022, when Reliance Retail pumped in $200 Mn for a 25.8% stake, becoming the biggest shareholder of the startup. Tech giant Google, which first invested in Dunzo in 2017, also doubled down in subsequent rounds.

But despite the capital, Dunzo struggled to figure out the unit economics for hyperlocal deliveries and also missed the quick commerce bus in many ways, even though it had the first-mover advantage.

Initially positioned as a hyperlocal delivery platform for everything from groceries to medicines, it pivoted aggressively into quick commerce at the peak of its 2021–22 frenzy. While Eternal-owned Blinkit, Zepto, and Swiggy’s Instamart quickly consolidated market share with deeper pockets and stronger operational playbooks, Dunzo fell behind.

By 2023, cracks were already evident: employee layoffs, delayed salaries, vendor disputes, and shutdown of dark stores in key cities signaled a liquidity crunch. It also received legal notices from at least seven companies, including Google and Facebook, over pending dues in July 2023.

As for FY23, the last fiscal year for which Dunzo’s financial data is available, the startup’s losses that surged to INR 1,801 Cr against an operating revenue of INR 226.6 Cr.

The unraveling was also reflected in its leadership churn. Cofounder Dalvir Suri exited in late 2023, followed by Mukund Jha and then cofounder and CEO Kabeer Biswas in early 2025. While Biswas moved on to Flipkart’s quick commerce vertical Minutes, Jha set up AI coding startup Emergent.