Dunzo is still stuck in a limbo.

After more than a year of negotiations and speculation, the startup’s current cash crunch is likely to be solved by its largest shareholder Reliance Retail. But this does not mean that Dunzo is completely out of the water yet.

Sources privy to the development told Inc42 that Reliance Retail may also end up acquiring the troubled firm at a throwaway valuation. The conglomerate currently holds more than 25% stake in Dunzo after it invested $200 Mn in January 2022.

Interestingly, Reliance has been in talks with the company for more than a year, as reports emerged in July last year about a potential lifeline for Dunzo, which has been mired in a severe cash crunch since early 2023.

At the time of its last funding round, Dunzo was valued at $770 Mn, but the Kabeer Biswas-led startup has fallen from grace since then.

Unable to hit the brakes on its marketing spending, employee costs and operational expenses and forced to sit out of the quick commerce boom, Dunzo turned to B2B deliveries as we reported earlier.

But now, the company is moving back to its older model — deliveries from retail stores to consumers — in a shift that’s clearly meant to protect the brand value inherent in Dunzo’s name.

Over the past year, Dunzo has seen the exit of two cofounders — Mukund Jha and Dalvir Suri — while CEO Biswas and the other cofounder Ankur Agarwal desperately try to bring in more funds to keep operations going.

Will Reliance Deal Go Through?

Biswas told employees on July 20 that key investors including Reliance Retail have agreed to infuse funds into the company, according to sources. He also claimed that the fresh capital will be deployed to clear the pending salaries and other dues owed to former and current employees as well as vendors.

In an email dated May 19,........

© Inc42