Adding to the growing challenges faced by Dunzo, the National Company Law Tribunal (NCLT) has accepted Velvin Packaging Solutions Private Limited‘s insolvency plea against the quick commerce startup.

As per information available on the NCLT website, Velvin Group, a leading Indian manufacturer of sustainable packaging solutions, filed the plea in November last year. The plea was registered earlier this month.

It’s worth noting that Dunzo has received numerous legal notices from its vendors regarding payment of outstanding dues, as it grapples with severe cash flow issues that are hindering its ability to sustain operations.

Continue Exploring: Legal troubles mount for struggling Dunzo as companies seek payment resolution

Last year, the startup received legal notices from Google India, Nilenso, Clover Ventures, Facebook India Online Services Private Limited (FBI), Cupshup, Koo, and Glance for the same matter. Dunzo’s outstanding dues to these vendors amount to around INR 11.4 Cr.

Established in 2015 by Kabeer Biswas, Suri, Mukund Jha, and Ankur Aggarwal, Dunzo connects consumers with nearby stores and facilitates deliveries of products including groceries, medicines, and food, among other daily needs. Its venture into the quick commerce realm with Dunzo Daily led to a sharp increase in its cash burn.

Dunzo encountered difficulties in expanding its business, especially when juxtaposed with quick commerce giants like Blinkit, Zepto, and Swiggy Instamart. Although it has shifted its focus solely to the less capital-intensive B2B operations, it remains a minor contender in this sector, contending with competitors such as Porter, Shiprocket, as well as Zomato and Ola.

Continue Exploring: Cash-strapped Dunzo promises to settle outstanding payments to former employees by March-end

Dunzo has secured approximately $457 million through various funding rounds to date. Among its investors are Reliance, Google, Lightbox, Lightrock, and Alteria Capital. In January 2022, the startup received a funding of $240 million from Reliance Retail.

Dunzo has faced significant challenges over the past year or so, primarily due to cash flow constraints, leading to several rounds of layoffs and prolonged delays in employee salary disbursements. Additionally, the startup experienced the departure of some key board members and co-founder Dalvir Suri last year.

Continue Exploring: Dunzo Co-Founder Dalvir Suri announces departure after six years of service

In the midst of these developments, Flipkart is said to be considering acquiring the financially struggling startup. Nevertheless, complications regarding Dunzo’s ownership structure have posed challenges for both parties in reaching an agreement.

Continue Exploring: Flipkart explores buyout of cash-strapped Dunzo

The Bengaluru-headquartered hyperlocal delivery startup witnessed a significant increase in losses, soaring to INR 1,801 crore in the financial year 2022-23 (FY23) from INR 464 crore in the preceding fiscal year. Although its operating revenue surged by 317% to INR 226.6 crore in FY23 from INR 54.3 crore in FY22, total expenses ballooned by 286% to INR 2,054.4 crore in FY23.