Dunzo goes offline after CEO Kabeer Biswas departs to join Flipkart

Once a pioneering player in the quick commerce space, Dunzo failed to maintain its competitive edge, falling behind other major players in the market

Dunzo, once a leader in India's hyperlocal delivery space, has gone offline following the departure of its co-founder and CEO, Kabeer Biswas, who has joined Minutes, the Flipkart quick commerce business. This marks a significant turning point for the company, which had already been experiencing a steady decline over the past 12-18 months. With its app and website now completely shut down, users are met with error messages, signalling the end of the app’s services. The Dunzo offline news is a stark reminder of how quickly the industry’s dynamics can shift in the competitive quick commerce space.

Financial struggles and downsizing

Despite raising over $450 million, including a major investment of $200 million from Reliance Retail in January 2022, the Dunzo delivery app faced persistent financial difficulties. The company’s operations had been significantly reduced, and it struggled to meet the demands of its growing liabilities. In addition to operational cuts and layoffs, Dunzo encountered salary delays for its employees. The situation worsened as Dunzo revealed that creditors had taken the company to the National Company Law Tribunal (NCLT) for unresolved financial dues, highlighting the ongoing financial turmoil.

Reliance Retail and Google are major stakeholders in the company, holding 26% and 20% stakes, respectively. In 2023, PhonePe proposed investing in Dunzo's merchant network but faced rejection. Dunzo's investors expressed concerns over PhonePe's parent company Walmart, and were also reluctant to relinquish the Dunzo brand.

Rivals seize market share

Once a pioneering player in the quick commerce space, Dunzo failed to maintain its competitive edge, falling behind other major players in the market. Companies like Zomato-owned Blinkit, Zepto, and Swiggy Instamart have gained significant ground, with Blinkit leading the pack with a 46% market share, followed by Zepto at 29% and Swiggy Instamart at 25%, according to a recent Motilal Oswal report.

The fall of Dunzo delivery app, combined with the rise of its competitors, highlights the challenges faced by quick commerce startups in India. As Dunzo exits the scene and the Kabeer Biswas Flipkart move signals a shift, the competitive landscape in India’s quick-commerce market becomes more dominated by established players.