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Thursday, January 27, 2022

Reliance Retail leads $240-mn round in Dunzo, picks up 25.8%

In a statement, Reliance Retail said it has led a $240 million investment round in Dunzo, of which it has put in $200 million. This values the Bengaluru-based startup at a little over $775 million.

Written by Pranav Mukul | New Delhi |
January 7, 2022 1:21:21 am
The round also saw participation from Dunzo’s existing investors, including Lightbox, Lightrock, 3L Capital and Alteria Capital.

Reliance Retail Thursday announced acquisition of 25.8% stake in Google-backed hyperlocal quick commerce startup Dunzo, in what marks the entry of India’s largest retailer in a segment crowded by established and new players such as BigBasket, Swiggy, Blinkit, Zepto, etc.

In a statement, Reliance Retail said it has led a $240 million investment round in Dunzo, of which it has put in $200 million. This values the Bengaluru-based startup at a little over $775 million. The round also saw participation from Dunzo’s existing investors, including Lightbox, Lightrock, 3L Capital and Alteria Capital.

“The capital will be used to further Dunzo’s vision to be the largest quick commerce business in the country, enabling instant delivery of essentials from a network of micro warehouses while also expanding its B2B business vertical to enable logistics for local merchants in Indian cities,” the statement said.

Currently, Dunzo is available across seven metro cities in India and the statement said that the additional capital will be used to expand the quick commerce business to 15 cities. Earlier this year, Dunzo launched its instant delivery model ‘Dunzo Daily’ in Bengaluru, and has been witnessing more than 20 per cent week-on-week growth. The Dunzo Daily model delivers daily and weekly essentials within 15-20 minutes, with a focus on providing high quality fruits and vegetables.

This investment is expected to give a booster shot to Dunzo’s quick commerce ambitions in a market where newer names had overtaken the startup on its home turf. Recently, food-delivery platform Swiggy committed a $700 million investment in its q-commerce vertical Instamart. Mumbai-based startup Zepto, which was founded by two Stanford University dropouts, last month raised $100 million in Series C funding led by Y Combinator’s Continuity fund, valuing the 10-minute grocery delivery firm at $570 million.

In addition to the funding, Dunzo and Reliance Retail will also enter into business partnerships, wherein Dunzo will enable hyperlocal logistics for the retail stores operated by Reliance Retail, to add onto Reliance Retail’s omni-channel capabilities. Also, Dunzo will facilitate last mile deliveries for JioMart’s (Reliance’s online grocery platform) merchant network.

Notably, Dunzo had also reportedly been in talks with the Tata Group for an investment through which the conglomerate wanted to pick a majority stake in the startup. This deal was being explored by the Tata Group to give a leg up to its e-grocer BigBasket’s quick commerce plans.

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