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Reliance Industries Ltd's retail arm has invested $200 million (around 1,488 crore) in Bengaluru-headquartered Dunzo as it looks to get a foothold in the country's rapidly growing market of quick delivery.

With the investment of $200 million, Reliance Retail will own 25.8% stake in the online delivery platform on a fully diluted basis.

Existing investors Lightbox, Ligthrock, 3L Capital and Alteria Capital also participated in the latest funding round that was led by Reliance Retail Ventures Ltd.

"With an investment of USD 200 million, Reliance Retail will own 25.8% stake," the statement said.

In addition to the funding, Dunzo and Reliance Retail will also enter into certain business partnerships. Dunzo will enable hyperlocal logistics for the retail stores operated by RRVL, further adding onto Reliance Retail’s omni-channel capabilities.

Dunzo will also facilitate last mile deliveries for JioMart’s merchant network.

The capital will be used to further Dunzo’s vision to be the largest quick commerce business in the country, enabling instant delivery of essentials from a network of micro warehouses while also expanding its B2B business vertical to enable logistics for local merchants in cities across the country, the statement 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," RRVL Director Isha Ambani said.

She added that through the partnership with Dunzo, the company 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.

“Our merchants will get access to the hyperlocal delivery network of Dunzo to support their growth as they move their business online through JioMart," she said.

Dunzo is a leading player in the quick commerce category which has an addressable market opportunity of over USD 50 billion.

At present, Dunzo is available across seven metro cities in India and the additional capital will be used to expand the quick commerce business to 15 cities, the statement said.

Dunzo launched its instant delivery model ‘Dunzo Daily’ in Bengaluru earlier this year, which is seeing over 20% week-on- week growth.

The Dunzo Daily model delivers daily and weekly essentials within 15-20 minutes, with a focus on providing high quality fruits and vegetables.

While traditional e-commerce deliveries take a day or longer, quick commerce (or q-commerce)

enables customers to get small quantities of goods to customers in a shorter period of time.

According to a RedSeer report, the quick commerce sector in India is expected to grow to USD 5 billion by 2025 from the current USD 0.3 billion.

The report said quick commerce is growing in India on the back of trends like a shift in consumer behaviour, entry of big players like BigBasket and Blinkit , and rise of instant delivery platforms.

Last month, food delivery platform Swiggy announced an investment of USD 700 million (about 5,250 crore) in its express grocery delivery service, Instamart.

Previously, Ola had also started piloting a quick delivery service for items like groceries in Bengaluru.

RRVL has been on an aggressive acquisition spree to consolidate its position in the Indian market, while bolstering its digital play to tap into the burgeoning demand for e-commerce services in the country.

In November 2021, RRVL acquired the retail lingerie businesses under the ‘amante’ umbrella brand from MAS Brands, a wholly-owned subsidiary of Sri Lanka-based MAS Holdings, for an undisclosed amount.

In October, RRVL had acquired a 52% stake in veteran couturier Ritu Kumar's firm Ritika Pvt Ltd for an undisclosed amount, while Reliance Brands Ltd (RBL) has announced it would pick a 40% minority stake in fashion designer Manish Malhotra's MM Styles Pvt Ltd.

In September, RRVL had acquired the control of search & discovery platform Just Dial for a consideration of 3,497 crore.

Last month, RBL and Indian couturier Anamika Khanna agreed to a 60:40 joint venture for owning and developing fashion brand AK-OK.

It also bought a minority stake in Actoserba Active Wholesale, which owns and operates online lingerie store Zivame, last year.

RRVL, a subsidiary of RIL, is the holding company of all the retail companies of the Group. It reported a consolidated turnover of 1,57,629 crore and a net profit of 5,481 crore for the year ended March 31, 2021.

Back in 2020, RIL had raised 47,265 crore by selling nearly 10% stake in RRVL. It had raised funds from global private equity funds which included - Silver Lake Partners, KKR, GIC, TPG and General Atlantic, as well as sovereign wealth funds Mubadala, ADIA and PIF.

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