Reliance Writes Off $200 Million Investment in Dunzo After Collapse

Reliance Retail Ventures has now formally written off its entire ₹1645 crore (approximately $200 million) investment in Dunzo, the quick commerce startup which wound up operations in early 2025. The massive write-off is one of the major failures in the flourishing Indian startup ecosystem, particularly in the rapidly expanding yet intensely competitive quick commerce industry. The story of Dunzo and its subsequent failure is an inspiring tale of rapid innovation, enormous obstacles and the harsh truth of scaling a hyper-fast delivery business in India.

Dunzo’s Meteoric Rise in Quick Commerce

Dunzo was established in 2015 and soon established itself as a leader in the Indian quick commerce market, a segment that offers consumers super-fast grocery, daily necessities and meal delivery to their door in under an hour in many cases. Strong investor interest was witnessed in the company with strategic investment by Reliance Retail and other international companies such as Google, as the company has a technology-enabled platform.

Despite raising more than 450 million at its peak, Dunzo was aiming to establish the largest network of hyperlocal deliveries in India, using a combination of aggregators, local stores and independent delivery partners. In early 2022, Reliance Retail, which already has an extensive retail and e-commerce infrastructure, acquired a 25.8 percent stake in Dunzo, indicating its interest in the fast-delivery segment of the market.

Operations Problems and Competitive Pressures

However, Dunzo experienced a series of operational issues, even though the company had gained momentum in the market early on. The quick commerce industry has the reputation of being capital-intensive because of the necessity of huge delivery fleets, warehouse capacities and ever-changing technology of logistics. Dunzo failed to become profitable when it aggressively expanded to several cities, often facing higher delivery costs and variable service quality.

Adding to these challenges came intense competition with well-financed competitors like Blinkit (Walmart-backed), Zepto and Instamart (Reliance-owned). Such companies engaged in price wars and network extension, reducing the pricing power and margins of all competitors.

The strain on operations at Dunzo was seen through several rounds of layoffs and claims of unpaid salaries to employees, employee dissatisfaction and delayed payments to vendors. Such failures are demoralizing and affect its capacity to maintain service levels and customer loyalty.

The Final Blow: Shutdown and Write-Off

The cracks became irreparable in January 2025. The app and the website of Dunzo were offline, which indicated that all business activities were on hold. This was after its sole remaining co-founder and CEO, Kabeer Biswas, left to join Flipkart to head its new quick commerce venture, Minutes. Dunzo would not be able to continue with the business without leadership and new capital.

Lenders did not take long to go to the National Company Law Tribunal (NCLT) to take action against unpaid debts. After these events, Reliance Retail officially made the decision to write off the full amount of its investment, with the value of its equity in Dunzo being zero.

This write-off is a brutal yet occasionally unavoidable fact in start-up investing, especially in industries where disruption is fast and competition is intense. The ₹1,645 crore loss can be added to the list of other high-profile write-offs in India startup history, such as the $500 million write-off by Prosus in Byju and the ₹276 crore write-off of 4B Networks by Info Edge.

Implications for Reliance and the Sector

In the case of Reliance, the write-off is a huge financial loss, but it is also a strategic control over its investment portfolio. Reliance is also keen on investing in e-commerce, retail and digital services that will supplement its core business. The Dunzo case points to the significance of close operationalization and market positioning.

The quick commerce industry is competitive yet appealing. The enormous consumer demand and potential scale are shown by the success of other players such as Blinkit, Zepto and Instamart by Reliance. However, such ventures need to pay great attention to operational efficiency, unit economics and sustainable growth to prevent such mistakes as Dunzo made.

Lessons for Startups and Investors

The story of Dunzo can teach both startups and investors. High rates of growth in a capital-intensive industry should be balanced by strict cash flow controls and a clear route to profitability. The startups need to be concerned with strong operations and investors need to evaluate the market competition, scalability and viable economics well.

Although innovation is necessary, the secret of long-term success is to find a balance between growth and the efficient use of resources. The dynamics of the quick commerce market, which are characterized by changes in consumer preferences and the development of technology, require responsiveness and constant optimization.

Future of Quick Commerce in India

Nevertheless, even though Dunzo has failed, quick commerce is a sector with plenty of potential. Urban consumers are also expecting a quicker, dependable product delivery and the logistics and AI-based inventory management technology are starting to solve the inefficiencies of the past.

The next wave of success in quick commerce will probably require the ability to combine digital capabilities with strong physical market penetration to reduce the cost of last-mile delivery and adapt swiftly to shifting consumer trends.

Reliance will probably continue to do as it has been doing with its large retail presence, technology platforms and financial strength to strengthen its place in this segment, investing in businesses that have scalable unit economics and operational viability.