Dunzo Goes Offline Following CEO Kabeer Biswas’s Exit
Dunzo, once a leader in India’s quick commerce market, has officially gone offline, leaving its users with error messages on both the app and website. This sudden shutdown follows the departure of co-founder and CEO Kabeer Biswas, who has joined Flipkart’s quick commerce division, Minutes.
The platform, backed by Reliance Retail and Google, had been struggling financially for over a year. Despite raising over $450 million in funding, including a $200 million investment from Reliance Retail in January 2022, Dunzo has faced mounting challenges, including operational downsizing, delayed employee salaries, and unpaid creditor dues.
The Decline of Dunzo
Dunzo was once at the forefront of India’s hyperlocal delivery market. However, in the last 12-18 months, the company experienced a steep decline due to financial troubles.
Key challenges included:
- Reduced operations across several cities.
- Delays in employee salary payments.
- Creditor lawsuits filed in the National Company Law Tribunal (NCLT) over unpaid dues.
These financial hurdles ultimately led to the platform shutting down entirely following Biswas’s departure.
CEO’s Departure Adds to Dunzo’s Struggles
Kabeer Biswas’s decision to leave Dunzo for Flipkart has added to the company’s woes. His move to Flipkart’s quick commerce venture, Minutes, underscores a shift in leadership and strategy at a critical juncture for Dunzo. Without its co-founder, the company’s future has become even more uncertain.
Reliance Retail and Google’s Investment in Dunzo
Reliance Retail and Google were key stakeholders in Dunzo:
- Reliance Retail held a 26% stake, becoming a significant backer of the platform.
- Google held a 20% stake, reflecting its support for India’s growing quick commerce space.
Despite these heavyweights on its side, Dunzo could not navigate the financial and operational challenges that plagued it.
Missed Opportunities and Declined Offers
In 2023, PhonePe reportedly made an offer to invest significantly in Dunzo’s merchant network business. However, this proposal was turned down due to concerns about Walmart, PhonePe’s parent company, and the potential risk to Dunzo’s brand identity. This decision may have cost Dunzo a chance at financial recovery.
Dunzo’s Legacy in Quick Commerce
Dunzo’s rise and fall highlight the volatile nature of India’s quick commerce industry. Despite revolutionizing the delivery landscape with its hyperlocal model, Dunzo couldn’t maintain its position amid fierce competition and financial strain.
With Reliance Retail and Google as major backers, the company’s struggles serve as a cautionary tale for startups navigating rapid growth and sustainability challenges.
