Bengaluru-based hyperlocal delivery startup Dunzo has been admitted into insolvency by the Bengaluru bench of the National Company Law Tribunal (NCLT) following petitions from vendors Exotel Techcom Private Limited and Velvin Packaging Solutions Pvt Ltd. The NCLT has initiated the Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code 2016, appointing an Interim Resolution Professional (IRP) to oversee the process, according to an Inc42 report.
Despite raising $485 million from prominent investors like Reliance Retail, Google, Lightbox, and Blume Ventures, Dunzo has faced significant challenges. Its pivot to quick commerce failed to compete with rivals like Blinkit, Zepto, and Swiggy’s Instamart, who capitalized on stronger operational strategies. Dunzo’s financial struggles were stark in FY23, with losses ballooning to Rs. 1,801 crore against a revenue of Rs. 226.6 crore.
The startup’s troubles were compounded by a $240 million write-off by Reliance Retail, which held a 25.8 percent stake, as well as legal notices from over a dozen vendors, including Google and Facebook, for unpaid dues totaling nearly Rs. 80 crore. Leadership exits, including cofounders Dalvir Suri, Mukund Jha, and CEO Kabeer Biswas, further destabilised the company.
