Hyperlocal delivery platform Dunzo is reportedly exploring a potential sale to address its mounting financial challenges. The company has reached out to major players like Reliance Retail, Flipkart, PhonePe, and Swiggy, seeking a buyer to take over its debt and liabilities.
Dunzo is searching for an acquirer
According to a report by Arc Web, Dunzo is searching for an acquirer willing to take on its ₹600 crore debt and outstanding vendor payments in exchange for ownership of the business. Despite its financial troubles, the report claims the company has achieved operational profitability, handling 40,000 to 50,000 deliveries per day.
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This comes amid rumors of co-founder and CEO Kabeer Biswas considering an exit from the company. Earlier reports suggested that Reliance Retail had contemplated acquiring Dunzo at a significantly reduced valuation, but the deal never materialized. In July, Biswas informed employees that Reliance and other investors had committed to fresh funding, which ultimately fell through.
The fundraising process had hit a dead end
In August, Biswas acknowledged to employees that the fundraising process had hit a dead end, leaving the company in a precarious financial position. Reliance reportedly stepped back from negotiations due to the burden of Dunzo’s debt.
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The fallout has pushed the company closer to insolvency. Two creditors—Invoice Discounters of Dunzo Digital and Velvin Packaging—have already initiated insolvency proceedings against the startup over unpaid dues. Dunzo’s financial struggles mark a stark contrast to its earlier ambitions in the competitive quick commerce space. With no funding lifeline in sight, the company’s future now hinges on finding a buyer willing to shoulder its liabilities.
