Indian e-commerce giant Flipkart has been in talks in recent weeks about a potential acquisition of Dunzo, a hyperlocal delivery startup backed by Reliance Retail, three people familiar with the matter told TechCrunch. But complications surrounding Dunzo's ownership structure are making it difficult for the two companies to reach a deal, according to two people familiar with the negotiations.
All three sources said talks are still ongoing. The acquisition talks come after a tumultuous year for Dunzo, which has struggled to raise capital and pay employees. The startup, once valued at $500 million, has ceded much of the hyperlocal delivery market to startups Zepto, Swiggy and Zomato's BlinkIt in recent quarters.
The deal has yet to materialize as there is skepticism about exactly what Flipkart will inherit if it acquires Dunzo. Reliance Retail, Dunzo's largest investor, has also not approved the deal.
Flipkart and Dunzo did not immediately respond to requests for comment on Tuesday night.
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