Flipkart is reportedly in discussions regarding the possible acquisition of Dunzo, a startup backed by Reliance.

Flipkart, a leading e-commerce platform in India, has been in talks recently to potentially acquire Dunzo, a hyperlocal delivery startup backed by Reliance Retail. However, the complexity of Dunzo's ownership structure has made it challenging to finalize the acquisition deal, as reported by TechCrunch. Despite the hurdles, discussions are ongoing between the two parties.

Dunzo has faced various challenges recently, including difficulties in securing funding and meeting payroll obligations. Despite having raised around $500 million so far, the company has faced increased competition from emerging players like Zepto, Swiggy, and Zomato's BlinkIt in the hyperlocal delivery market.

Flipkart, valued at more than $32 billion, sees potential value in certain aspects of Dunzo's business, particularly its business-to-business offerings. However, the Walmart-owned company is cautious about the potential assets it would acquire, given Dunzo's significant intellectual property ties with Reliance Retail. Moreover, the deal has not been approved by Reliance Retail, which holds a 26% stake in Dunzo.

Dunzo has reportedly explored acquisition discussions with various entities over the past three years, including Tata and Zomato. However, Dunzo denied these reports as "hearsay," according to TechCrunch.

Initially, Dunzo aimed to disrupt India's e-commerce sector with its rapid delivery services, backed by investors like Google, Blume Ventures, and Lightbox. However, like other instant delivery businesses, Dunzo faced challenges as consumer preferences returned to pre-pandemic norms.