Reviving the Uber Rival: BluSmart Investors Seek $30M in New Funding to Fuel Growth

In a bid to revitalize the struggling Indian cab-hailing startup, BluSmart, a group of investors is considering injecting an additional $30 million. This investment follows the abrupt suspension of the company’s operations last month, as reported by TechCrunch. However, the proposed funding comes with a significant condition: the resignation of BluSmart co-founder Anmol Singh Jaggi.

Investment Proposal and Conditions

The proposed investment would be structured as unsecured debt aimed at addressing BluSmart’s operational liabilities, which include overdue payments to employees and other financial obligations. Key investors, such as BP Ventures and Switzerland-based ResponsAbility, have commenced discussions regarding this potential resolution.

Jaggi’s Position and Potential Resignation

While Anmol Singh Jaggi has yet to formally resign from his position, sources indicate that he has verbally agreed to step down from the board, contingent on assurances against any future legal repercussions from BluSmart’s investors. His co-founder, Punit K. Goyal, has not responded to inquiries regarding the situation.

Impact of Operations Suspension

BluSmart halted its operations after a probe was initiated into Gensol Engineering, its primary EV lessor, which also shares Jaggi as a co-founder. This operational pause has had widespread effects:

• 600 employees have not received their salaries since at least March.
• Approximately 2.5 billion Indian rupees (~$30 million) in pending dues, including 500 to 600 million Indian rupees owed to employees.
• About 8,700 EVs in BluSmart’s fleet have been abandoned, risking damage to the vehicles’ batteries and components.

Drivers Affected and Alternative Opportunities

The suspension has also affected BluSmart’s drivers, leading some to go on strike in New Delhi. However, relief may be on the horizon as Evera Cabs, another EV cab-hailing service, has announced the addition of 500 cabs leased from BluSmart lenders. They aim to incorporate an additional 1,000 EVs, including those associated with BluSmart.

Challenges Ahead for BluSmart

BluSmart’s existing investors are eager to preserve the startup’s brand and avoid letting other companies, including Evera and Uber, utilize its fleet. They are aiming to restart services within three weeks, but there are hurdles to overcome:

• Corporate governance issues.
• Indirect impacts from the ongoing probe into Gensol by the Indian corporate affairs ministry.

Future Prospects and Potential Acquisitions

The uncertainty surrounding Jaggi’s resignation remains, especially since the Indian stock exchange regulator has mandated his resignation from Gensol. Interestingly, potential acquisition interests have emerged:

• Eversource Capital expressed interest in purchasing BluSmart and merging it with its B2B fleet operator, Lithium Urban, although this offer was not accepted by BluSmart’s board.
• Adani Group has also shown interest in acquiring BluSmart to utilize its fleet at airports, although no comments were received regarding this potential acquisition.

Despite these challenges, BluSmart investors remain optimistic that the startup can attract further investments from strategic partners such as Eversource Capital, Uber, or Adani once operations resume.

For further insights on the electric vehicle industry and cab-hailing services in India, visit Industry News.