Walmart-backed Indian e-commerce company Flipkart has held discussions about the possibility of acquiring on-demand delivery platform Dunzo, TechCrunch reported on Tuesday, citing three people familiar with the matter.
While negotiations are ongoing, complications surrounding Dunzo’s ownership structure have prevented the two parties from reaching an understanding on a deal, the report said.
The report added that Reliance Industries’ retail arm acquired a 26% stake in Dunzo for $200 million in 2022, but the deal has not yet been approved.
In an emailed response to Reuters, Dunzo denied “having had any conversations with any participants about acquiring the business.”
Flipkart and Walmart did not immediately respond to Reuters’ request for comment.
Cash-strapped Dunzo is also backed by Alphabet’s Google, which recently announced restructuring, wage deferrals and layoffs.
Dunzo had raised $75 million (approximately Rs 614 crore) in funding through convertible notes in April last year and laid off around 30 per cent of its workforce as it planned to revamp its business model.
Major backers Reliance Retail and Alphabet added about $50 million (roughly Rs. 409 crore) in funding, while other existing investors contributed the remaining funds.
It is said that under the new business model, the company will cut about 50% of its dark stores and only operate those stores that are profitable or close to the profit threshold.
In July 2023, Walmart paid $1.4 billion (approximately Rs. 11,520 crore) to acquire hedge fund Tiger Global’s investment in Flipkart. The deal values the e-commerce company at $35 billion (approximately Rs. 2,88,010 crore).
© Thomson Reuters 2024
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