This startup, which is backed by Mukesh Ambani is in crisis as co-founder wants to exit after…., his name is…

Dunzo began in 2014 as a simple WhatsApp group but soon evolved into a full-fledged hyperlocal delivery platform, securing funding from major investors like Reliance, Google, Blume Ventures, and Lightrock.

Since 2023, Bengaluru-based Dunzo has faced significant hurdles in securing new funding to remain competitive in the rapidly growing quick commerce sector. Speculation about co-founder and CEO Kabeer Biswas stepping down has further fueled uncertainty about the company’s future in a market dominated by deep-pocketed competitors.

Dunzo, founded in 2015 by Kabeer Biswas, Dalvir Suri, Mukund Jha, and Ankur Aggarwal, revolutionized hyperlocal delivery in India. Backed by Reliance Retail, the startup gained popularity for connecting consumers with nearby stores to deliver groceries, medicines, and other essentials quickly. However, the company has struggled in recent years, particularly against larger players like Zomato’s Blinkit, Swiggy’s Instamart, and Zepto, which have been expanding aggressively.

Dunzo CEO Kabeer Biswas to step down

According to media reports, Biswas is in discussions with investors about stepping down as CEO. While some investors reportedly support his decision, Reliance Retail holds the final say. According to a report by Moneycontrol, Biswas has already submitted his resignation, and an official announcement is expected soon. If confirmed, his departure will mark the exit of the last founding member.

To be sure, Dunzo will continue to operate in its current state. “Biswas has resigned from the company and his resignation has been accepted, a formal announcement can be expected over the coming weeks,” one the persons cited above told Moneycontrol.

Reliance Retail, despite its backing, appears to be distancing itself from Dunzo. The conglomerate has refrained from intervening during the company’s financial struggles or exploring a potential buyout, signaling a lack of confidence in Dunzo’s recovery.

Adding to its challenges, Dunzo downsized earlier this year, laying off 150 employees to cut costs. Furthermore, the company is reportedly facing insolvency proceedings initiated by creditors over unpaid dues, compounding its difficulties.

Meanwhile, former co-founder Ankur Aggarwal is preparing to launch a new venture, Kuik, which aims to assist brands in establishing quick delivery systems. This development reflects the increasingly competitive landscape of quick commerce in India, which continues to grow as established players expand their reach.

What led to downfall of Dunzo?

Dunzo began in 2014 as a simple WhatsApp group but soon evolved into a full-fledged hyperlocal delivery platform, securing funding from major investors like Reliance, Google, Blume Ventures, and Lightrock. The company gained traction as a key player in the quick commerce space, competing with established rivals such as Swiggy Instamart, Tata BigBasket, and Zomato-owned Blinkit. However, its rapid growth came with significant challenges, including high cash burn and an increasingly competitive market.

Between 2015 and 2022, Dunzo consistently raised capital, but the entry of new competitors like Zepto further strained its market position. Zepto’s aggressive expansion and ability to capture a substantial share of the quick commerce market placed additional pressure on Dunzo’s operations. Despite securing additional debt since 2022, the company struggled to maintain financial stability, leading to operational disruptions.

Dunzo faced multiple defaults, including delayed salary payments to employees on several occasions, as reported by Moneycontrol. These financial troubles were compounded by lawsuits from vendors and numerous legal notices, which further hampered its ability to sustain operations. The mounting challenges eventually made it increasingly difficult for Dunzo to navigate the intensifying competition and keep its business running smoothly.