Dunzo, the India-based provider of a consumer product delivery app, raised $240m yesterday in a funding round led by Reliance Retail, the retail subsidiary of conglomerate Reliance Industries, underlining the international expansion of quick commerce and hyperlocal delivery services.
Reliance Retail paid $200m for a 25.8% stake, making it the company’s biggest investor, Dunzo co-founder and CEO Kabeer Biswas told the Economic Times. The round more than doubled its valuation from approximately $300m to $775m, and Lightbox, Lightrock, 3L Capital and Alteria Capital also took part.
Founded in 2014, Dunzo has built an online platform which allows people to buy a range of products including groceries, medicines, perishables and pet supplies from local stores and restaurants, with delivery times typically under 20 minutes.
The deal marks a further data point in for quick commerce in international markets, capitalising on consumer attitudes shifting towards instant gratification as well as increased willingness to pay more for higher convenience and faster services.
According to management consulting firm RedSeer, India’s quick commerce market was sized at roughly $300m in 2021 and is expected to reach $5bn by 2025.
Blinkit, the India-based grocery delivery service which recently rebranded from Grofers, counts internet and telecommunications group SoftBank’s Vision Fund as an investor and has also received an influx of funding in recent months.
The company raised $16.7m from venture capital firm KTB Ventures in October 2021, only four months after raking in $120m from restaurant review and food delivery platform developer Zomato and investment firm Tiger Global Management at a valuation of $1bn.
Billion-dollar rounds also became increasingly common in the sector over the course of the past year, both in established and newer markets. India-based Swiggy raised $1.25bn in a July 2021 series J round co-led by SoftBank Vision Fund 2 and internet group Prosus at a valuation of $5.5bn.
Vision Fund also backed a $1bn round for US-based on-demand grocery provider GoPuff at a valuation of $15bn the same month. Jokr secured $260m in series B funding last month from investors including HV Capital, the VC firm backed by publisher Holtzbrinck, at a $1.2bn valuation.
Reliance Retail Ventures director Isha Ambani said: “We are seeing a shift in consumption patterns to 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.
“Through our partnership with Dunzo, we will be able to provide increased convenience to Reliance Retail’s consumers and differentiated customer experience through rapid delivery of products from Reliance Retail stores.”
Dunzo had previously received investment from internet technology provider Google as part of a $40m series E round that also included Lightbox, Evolvence, Hana Financial Investment, LGT Lightstone Aspada and Alteria in January 2021.
Photo courtesy of Dunzo Digital Private Limited.