Reliance Retail writes off its ₹1,645 crore investment in Dunzo
Reliance Retail, the retail arm of Mukesh Ambani-led Reliance Industries, has officially written down its ₹1,645-crore investment in hyperlocal delivery firm Dunzo, which recently ceased its operations. This significant write-off is a stark reminder of the risks involved in venture capital investments, especially in the rapidly evolving startup ecosystem.
Reliance Retail had led a $240 million funding round in Dunzo in January 2022, acquiring a 26% stake in the company. At the time, the investment was seen as a strategic move by Reliance Retail to expand its presence in the e-commerce space and tap into Dunzo’s growing user base. However, things took a turn for the worse when Dunzo shut down its operations in January 2025, after its app and website went offline.
The last of Dunzo’s co-founders, Kabeer Biswas, left the firm in the same month, marking the end of an era for the company. The sudden shutdown of Dunzo’s operations has raised questions about the fate of its employees, customers, and investors. Reliance Retail’s decision to write off its investment is a clear indication that the company has lost confidence in Dunzo’s ability to recover and grow in the future.
The write-off is a significant blow to Reliance Retail’s balance sheet, and it highlights the risks involved in investing in startups. While venture capital investments can offer high returns, they also come with a high degree of uncertainty and risk. Startups are notoriously prone to failure, and even the most well-funded companies can falter if they fail to adapt to changing market conditions or innovate effectively.
In the case of Dunzo, the company faced stiff competition from other food delivery and hyperlocal logistics players, which made it difficult for it to scale and maintain its market share. Additionally, the company’s business model was heavily reliant on advertising revenue, which dried up during the pandemic. These challenges, combined with the company’s failure to innovate and adapt to changing consumer preferences, ultimately led to its demise.
Reliance Retail’s write-off is a stark reminder of the importance of due diligence and risk assessment when investing in startups. While the company may have seen potential in Dunzo’s business model and growth prospects, it failed to adequately assess the risks involved in investing in a startup. This failure to assess risk has resulted in a significant write-off, which could have been avoided with more thorough due diligence.
In conclusion, Reliance Retail’s write-off of its ₹1,645-crore investment in Dunzo is a significant setback for the company and a cautionary tale for other investors. The failure of Dunzo is a reminder of the risks involved in venture capital investments and the importance of conducting thorough due diligence before investing in startups. While the write-off is a setback for Reliance Retail, it also presents an opportunity for the company to learn from its mistakes and apply those lessons to future investments.
Sources:
https://yourstory.com/2025/08/reliance-writes-off-investment-dunzo
