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Hey Founders,
Welcome to The Runway Ventures — a weekly newsletter where I deep dive into failed startup stories to help you become the top 1% founder by learning from their mistakes with actionable insights.
Let’s get to it! 🚀
Today at a Glance:
☠️ 1 Failed Startup → Dunzo
⚠️ 2 Mistakes → Over-ambitious pivot to quick commerce
🧠 3 Lessons Learned → Stick to your core & scale gradually
🔗 The Runway Insights → How to use “but” strategically to sound direct and positive
💰 Southeast Asia Funding Radar → SkyeChip secured funding from Gobi Partners to design and develop semiconductors + boost domestic innovation in Malaysia
☠️ 1 Failed Startup: Dunzo
🚀 The Rise of Dunzo
🇮🇳 In 2014, four friends — Kabeer Biswas (the face of Dunzo), Ankur Agarwal, Dalvir Suri, and Mukund Jha — started a WhatsApp group in Bengaluru to run errands for friends. Need your forgotten wallet delivered? A last-minute grocery run?
They’d "Dunzo it" .
What began as a humble WhatsApp group to help people run daily errands soon evolved into an on-demand delivery service that would change urban life in India.
And Dunzo was born — a hyper-local on-demand delivery platform in India.
The Problem — 😣 Back then, hyperlocal delivery in India was chaotic and unorganised, making it difficult for people to get things delivered to them.
The Solution — 🛵 Dunzo was an “all-in-one” 24/7 delivery platform that could pick up and deliver practically anything to local Indians in their cities.
🏃🏻♂️ Dunzo solved this by connecting users to a network of delivery partners (called "Runners") via an app.
⚡️ They’d pick up anything (i.e. groceries, documents, laundry) and drop it off in under 45 minutes.
🔥 No task was too small, and their tagline "Just Dunzo It!" became a cultural meme
🛵 In short, Dunzo's mission is "to be the logistics layer of every city". People
could get anything delivered to them in a flash. "Just Dunzo It!"
 | 🤑 During one of the WhatsApp deliveries, Kabeer (CEO) delivered an order to Lightrock's Sahil Kinney, who was so impressed that he became Dunzo's first investor. This initial funding helped Dunzo expand rapidly. |
🔥 By 2017, Dunzo had:
1 million monthly orders
Expanded to 8+ cities
Became the first Indian startup to receive direct investment from Google
During the pandemic, they were the go-to app for essentials, hitting 40,000 delivery partners and 30,000+ partnered stores.
💰 At its peak, Dunzo raised a total funding of $476 million in over 19 rounds of funding, operating in 9 major Indian cities including Bangalore, Delhi, Gurugram, Pune, Chennai, Mumbai, Jaipur, Hyderabad, and Noida.
Not just that, in 2021, Dunzo smelled opportunity in quick commerce (delivering groceries in 19 minutes). They launched Dunzo Daily in August 2021 — a dark-store model (mini-warehouses stocked for fast delivery).
🎢 Dunzo’s brand was so beloved that “Dunzo it” became a common part of everyday lingo, and the company was riding high on both customer trust and impressive traction.
📉 The Fall of Dunzo
But wait, the quick commerce gamble ended up killing the company.
💸 Dunzo poured millions into building expensive “dark stores” and scaling operations nationwide, but the numbers didn’t add up. The costs soared while margins shrank, and the unit economics didn’t make sense at all.
What happened next is even crazy.
📌 Here’s how the quick commerce gamble killed Dunzo:
🛵 Just Dunzo It!
July 2014 — Dunzo was founded in Bengaluru by Kabeer Biswas, Ankur Agarwal, Dalvir Suri, and Mukund Jha as a WhatsApp group to run errands for friends.
Mar 2016 — 💰 Raised $650k in seed funding from Blume Ventures, Aspada Ventures, and Google India’s Rajan Anandan.
Dec 2017 — 💰 Landed $12 million from Google — its first direct investment in an Indian startup.
Expanded to 8+ cities, including Delhi and Mumbai.
2018-2019 — Launched bike taxis in Gurugram and partnered with local stores for groceries, medicines, and more.
Hit revenue of $500,000.
Aug 2019 — 💰 Raised ~$5 million (₹34.56 crore) in debt funding from Alteria Capital.
May 2020 — 😷 Partnered with PepsiCo and Google Pay for COVID essentials, hitting 100,000 daily orders.
Aug 2021 — ⚡️ Launched Dunzo Daily, promising 19-minute grocery deliveries, with rapid expansion to 130 dark stores.
Entered the cash-burning quick commerce race against Swiggy Instamart, Blinkit and Zepto.
Jan 2022 — 💰 Reliance Retail invested $200 million for a 25.8% stake.
Losses in FY22 surged to $62 million (₹464 crore) as dark-store costs soared.
Turned out that the influx of cash provided only a temporary reprieve as operational expenses and a soaring cash burn began to overwhelm the business.
⚡️ Quick Commerce → Quick Death
Apr 2023 — 🚨 Implosion and crisis finally happened.
First major layoffs (200+ employees) amid cash crunch.
Unit economics worsened with average order value stuck at $5 (₹400–450)
Jul 2023 — 😡 Delayed salaries and employees protested on LinkedIn.
Kabeer Biswas scrambled for funds but fell short of a $75 million target (raised only $45 million from Reliance via convertible notes).
Oct 2023 — 👋🏻 Co-founders Dalvir Suri and Mukund Jha exited.
Reliance wrote off its $200 million investment, signalling a loss of faith.
Revenue (FY23): $27 million
Losses (FY23): $240 million
2024 — Downsized to 50 employees, halted expansion, and faced insolvency lawsuits from unpaid vendors.
Jan 2025 — ☠️ App and website shut down after co-founder Kabeer joined Flipkart.
Reliance officially declared its investment a write-off.
Looking back, Dunzo’s diluted its core strengths after expanding to quick commerce that was so competitive. Despite getting a huge inflow of capital from investors, the rapid scaling simply didn’t match with the reality (where’s unit economics?).
🤦🏻♂️ After 10+ years of operation, Dunzo went crazily successful because of its ambition, but still collapsed because of its ambition. Weird huh?
Want to learn more about Dunzo’s downfall?
⚠️ 2 Mistakes
Co-Founders of Dunzo
Mistake 1: Over-ambitious pivot to quick commerce
Dunzo abandoned its hyperlocal delivery roots (groceries, docs, random errands) to chase the “quick commerce” trend (delivering groceries in 19 minutes).
The transition meant massive investments in opening 130+ dark stores and a complete operational overhaul. Instead of capitalising on their original strengths, they ended up burning cash on a model with razor-thin margins. The costs skyrocketed, and their unit economics — delivering essentials in under 20 minutes — became unsustainable.
⚠️ But here’s the kicker:
Dunzo’s average order value was ₹400 ($5), while dark stores needed ₹800+ orders to break even.
They were losing ₹300 per delivery — like selling samosas for ₹5 but paying ₹8 for the potato filling.
Mistake 2: Misaligned investor expectations
🙅🏻♂️ Reliance Retail invested $200 million in 2022, becoming Dunzo’s largest shareholder. However, Reliance’s veto power blocked Dunzo from raising additional funds when it needed them most.
This dependency created a financial bottleneck that killed the company.
On the other hand, Blinkit (owned by Zomato) and Zepto kept autonomy despite big backers. Blinkit focused on 10-minute deliveries in high-demand areas (e.g., Gurugram’s condos), while Dunzo tried to be everything to everyone.
🧠 3 Lessons Learned
Lesson 1: Stick to your core & scale gradually
Dunzo started as a simple, beloved errand service — pick up groceries, deliver documents, fetch forgotten keys. But in the race to become India’s "super app," they abandoned their hyperlocal roots and dove headfirst into quick commerce, dark stores, and even drone deliveries.
The result? Dunzo lost its identity trying to be a quick-commerce player, grocery app, and errand service all at once — and drowned in losses.
🌮 Key Takeaways:
📍 Nail one thing first
Niche down until you’re the best in one lane.
Like Ola (started with cabs, then added bikes, food, finance). Dunzo should’ve dominated hyperlocal deliveries before expanding.
🧪 Test, then scale
Prove profitability in 1 micro-market before expanding.
Grow at the speed of your unit economics, not competitors’ PR.
Zepto only launched in Mumbai first, perfected 10-minute delivery, then expanded. Dunzo went nationwide too soon.
Lesson 2: Prioritise sustainable growth over vanity metrics
Growth is important, but not at the expense of profitability. Before scaling aggressively, ensure your unit economics make sense.
🌮 Key Takeaways:
🙏🏻 Replace vanity metrics with “survival metrics”
❌ Vanity: "We did ₹100 crore GMV last year!"
✅ Sustainable: "Our contribution margin per order is +₹15."
🤝🏻 Track these 3 metrics religiously
Contribution Margin: (Revenue per order - direct costs like delivery/packaging)
Customer Repeat Rate: % of orders from existing users
Payback Period: Time to recover CAC (customer acquisition cost)
Lesson 3: Choose the right investors and align on vision
Dunzo took $200M from Reliance — and within months, its app became a JioMart logistics tool. Co-founders quit, employees revolted, and the original "quick errands" vision died. Meanwhile, Zepto turned down offers from BigBasket to maintain control — and now dominates quick commerce.
❌ Bad Investor Fit = Money with strings attached (strategic agendas, forced pivots, founder dilution).
✅ Good Investor Fit = Capital + trust to execute your vision.
🌮 Key Takeaways:
🧐 The “dirty laundry” reference check
Most founders only talk to investors’ favourite portfolio CEOs. Big mistake.
Instead, secretly call these 3 people to uncover the truth:
A founder they fired ("Was it fair?").
A junior employee at their portfolio company ("Do they meddle in ops?").
Their ex-lawyer/CFO ("Do they delay follow-on rounds?").
✅ Ask these 5 questions before signing:
"What’s your ideal exit timeline?"
If they say "3 years" but you want 10 — red flag.
"Have you ever replaced a founder?"
If yes, dig into why.
"Can you name 3 ways you’ll help beyond cash?"
Intro to customers? Talent networks?
"Will you take board seats/veto rights?"
Avoid investors who demand control early.
"How do you handle disagreements?"
Look for "We debate, then align" not "My way".
🔗 The Runway Insights
💰 Southeast Asia Funding Radar
SkyeChip secured funding from Gobi Partners to design and develop semiconductors + boost domestic innovation in Malaysia (Link)
Nūl raises $500K from Wavemaker Impact to help fashion brands prevent overproduction (Link)
The Wild Ventures received $750K (angel round) to build more world-class brands (Link)
Betterteem raises funding from 1337 Ventures to predict and mitigate employees resignations (Link)
RapidClaims raises $11M led by Accel to help hospitals and doctors get paid faster (Link)
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Validating ideas & building MVPs
Tech & product development
GTM strategy & fundraising
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Growing & monetising newsletters
Attract customers & investors by building a solid founder brand on LinkedIn
Promote your business to 18,000+ founders: Acquire high-value leads and customers for your business by getting your brand in front of highly engaged startup founders and operators in Asia.
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That’s all for today
Thanks for reading. I hope you enjoyed today's issue. More than that, I hope you’ve learned some actionable tips to build and grow your business.
You can always write to me by simply replying to this newsletter and we can chat.
See you again next week.
- Admond
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