India’s BluSmart Suspends Services Amid EV Loan Investigation: What It Means for the Future of Ride-Hailing
In recent developments, BluSmart, the innovative all-electric cab-hailing startup in India, has suspended its services in several cities, including Delhi-NCR, Bengaluru, and Mumbai. This decision comes at a critical time as the country’s market regulator, the Securities and Exchange Board of India (SEBI), has initiated an investigation into Gensol Engineering, a publicly listed company co-founded by two of BluSmart’s executives.
Service Suspension and Customer Concerns
BluSmart’s service has become unavailable to many customers in major metropolitan areas, with the company no longer displaying available ride slots. Notably, Delhi Airport issued an advisory confirming the temporary suspension of BluSmart services. This situation has raised concerns among customers, particularly regarding access to funds stored in their BluSmart wallets during this downtime.
Link to Gensol Engineering Investigation
The abrupt service halt follows SEBI’s investigation into Gensol Engineering, where allegations surfaced about the co-founders, Anmol Singh Jaggi and Puneet Singh Jaggi, misusing significant loan amounts for personal gain, including luxury property purchases near the capital.
Management Changes at Gensol
In response to the ongoing investigation, the Jaggi brothers have stepped down from their leadership roles. Gensol confirmed in their stock exchange filing, “They are no longer participating in the management of the Company as per SEBI’s instructions, effective immediately.”
Investor Reactions and Company Performance
Despite the service disruption, the BluSmart board has not communicated updates to investors until recently, prompting surprise from stakeholders. One investor remarked, “It seems to be a rub-off effect of what has happened with Gensol.”
Earlier this year, BluSmart reported impressive growth figures, announcing an annual recurring revenue (ARR) of 8.4 billion Indian rupees ($98 million) for 2024, with a monthly revenue of 700 million Indian rupees. The startup’s fleet expanded to approximately 8,700 electric vehicles (EVs), up from 6,000 earlier in 2024.
Funding and Future Prospects
BluSmart has attracted notable global investors, including BP Ventures and Mayfield India Fund. The Gurugram-based startup successfully raised $25 million in its most recent funding round, backed by Switzerland-based impact fund ResponsAbility, which valued the company at $250 million at that time.
Potential Partnership with Uber
Recent media reports suggested that BluSmart might pivot towards becoming a fleet partner for Uber. However, Gensol clarified in its stock exchange filing that it has not entered into any negotiations regarding mergers, acquisitions, or other significant transactions that remain undisclosed.
Responses from BluSmart Leadership
Attempts to reach co-founder Anmol Singh Jaggi for comments have gone unanswered. Meanwhile, co-founder Punit K. Goyal shared screenshots on LinkedIn, indicating that he feels impacted by the corporate governance issues surrounding Gensol.
As BluSmart navigates these challenges, customers and investors alike will be watching closely for updates on the company’s future and service resumption.
