- Flipkart eyes Dunzo’s B2B assets in acquisition talks.
- Dunzo struggles with market share and cash flow despite past funding.
- Flipkart’s interest highlights challenges facing instant delivery post-pandemic.
Indian e-commerce giant Flipkart has reportedly entered talks to acquire Dunzo, the hyperlocal delivery startup backed by Reliance Retail.
However, complex ownership structures and declining prospects for instant delivery companies are clouding the deal’s fate.
Can Dunzo overcome market struggles?
The discussions, still ongoing despite Dunzo’s denial, come after a turbulent year for the startup.
Struggling with cash flow and market share gains by rivals Zepto, Swiggy, and Zomato’s BlinkIt, Dunzo has also held acquisition talks with Tata and Zomato in the past.
Strategic value and uncertain future
Flipkart leads the Indian e-commerce market and remains skeptical about acquiring Dunzo entirely due to its ties to Reliance Retail. Its main interest lies in Dunzo’s business-to-business offerings, potentially boosting Flipkart’s reach in that segment.
The talks highlight the challenges facing instant delivery companies. Initially booming during the pandemic, the model has seen demand decline as consumer habits return to normalcy. Dunzo, despite raising $500 million, struggled to secure further funding in 2023.
While Dunzo maintains it’s on track for profitability and denies acquisition talks, Flipkart’s interest in its B2B segment suggests the company may still have strategic value in the evolving e-commerce landscape.
Whether the deal overcomes its hurdles or not, it serves as a reminder of the dynamic and potentially precarious nature of instant delivery startups in a post-pandemic world.
