Reliance Retail has led a $240 million funding round in Google-backed hyperlocal delivery startup Dunzo as the largest Indian retail chain expands to the instant commerce space, a category that has made inroads in the South Asian market in recent quarters.
Reliance Retail is investing $200 million in the round for a 25.8% stake in the six-year-old startup, which operates an eponymous hyper-local delivery service in nearly a dozen cities in India. The new round, a name for which was not disclosed, values the Bangalore-based startup at $775 million.
“We are seeing a shift in consumption patterns online and have been highly impressed with how Dunzo has disrupted the space. Dunzo is the pioneer of Quick commerce in India and we want to support them in furthering their ambitions of becoming a prominent local commerce enabler in the country,” said Isha Ambani, Director of Reliance Retail Ventures Limited, in a statement.
“Our merchants will get access to the hyperlocal delivery network of Dunzo to support their growth as they move their business online through Jio Mart,” she added.
Dunzo allows its customers to buy a wide range of items across several categories, from grocery, perishables, pet supplies and medicines to dinner from their neighborhood stores and restaurants. They can also use Dunzo to move their own items — such laptops, chargers, medicines, and lunch — around the city.
The startup plans to expand to more geographies and broaden its quick commerce play with the fresh funds, it said.
E-commerce accounts for less than 3% of all retail sales in India, according to industry estimates. Mom and pop stores and other neighborhood outlets that dot tens of thousands of cities, towns, villages and slums across the country drive most of the sales in the nation.
In a way, Dunzo, which counts Blume Ventures and Lightbox and LGT Lightstone Aspada among its investors, is reimagining how e-commerce and delivery could be done in India, thereby posing a challenge to Amazon and Walmart-owned Flipkart, as well as local food and grocery delivery startups such as Swiggy, Zomato, BigBasket and Grofers.
Kabeer Biswas, cofounder and chief executive of Dunzo, said in Reliance Retail — which is run by India’s richest man, Mukesh Ambani — the startup has found a “long-term partner with whom we can accelerate growth and redefine how Indians shop for their daily and weekly essentials.”
“We’re excited by the traction and velocity that Dunzo Daily has achieved and over the next 3 years, we aim to establish ourselves as one of the most reliable quick commerce providers in the country.”
This is a developing story. More to follow…
