BluSmart, the Indian electric vehicle ride-hailing startup that abruptly halted its operations last month, may soon see a revival. A group of the company’s existing investors has proposed a new $30 million funding package designed to address crucial operational challenges including overdue payments and outstanding employee salaries. However, acceptance of the deal hinges on BluSmart co-founder Anmol Singh Jaggi stepping down from the startup’s board.
The fresh infusion of funds would come in the form of unsecured debt, meant explicitly to manage operational liabilities and smooth the process of getting the business up and running again. Currently, BluSmart faces approximately ₹2.5 billion ($30 million) of pending obligations, of which between ₹500 million and ₹600 million relate directly to unpaid employee salaries.
The proposal for Jaggi’s resignation is not just financial—it is also to alleviate investor concerns over governance and leadership issues that arose recently. Sources indicated Jaggi has verbally signaled his willingness to resign from the board under the condition that investors will not pursue any related legal action against him in the future. Neither Jaggi nor fellow co-founder Punit K. Goyal replied to requests for comment on the developments.
BluSmart’s troubles began with a regulatory investigation surrounding Gensol Engineering, the company that leases most electric vehicles to BluSmart and shares Jaggi as a co-founder. The sudden service shutdown left the startup’s 600 employees unpaid for several weeks and grounded around 8,700 electric vehicles, potentially risking the condition of their batteries and components.
Adding complexity to BluSmart’s revival efforts are ongoing investigations by India’s Ministry of Corporate Affairs addressing possible corporate governance violations involving both BluSmart and Gensol Engineering. Additionally, Jaggi and his brother were required by regulators to resign from publicly traded Gensol, though this directive does not automatically carry over to BluSmart as a private entity.
Meanwhile, the suspension of BluSmart’s services led to protests and strikes among drivers who were abruptly displaced from their jobs. Some relief was provided when rival EV cab service Evera Cabs recently agreed to lease around 500 of BluSmart’s vehicles—and possibly more in the future—to bolster its own operations in New Delhi.
BluSmart’s investors have communicated clearly that losing control of the EV fleet and its brand identity remains a major concern. They are strongly motivated to restart operations within the next three weeks. However, challenges persist, particularly given potential buyers evaluating the struggling startup.
Recently, British-backed climate investment firm Eversource Capital showed an interest in acquiring BluSmart at a significantly reduced valuation, proposing a merger with its own EV venture, Lithium Urban. This offer was not accepted by BluSmart’s stakeholders, partly due to Lithium Urban’s own shaky financial position and aging vehicle fleet. Indian conglomerate Adani Group also expressed preliminary interest in acquiring BluSmart, aiming to integrate its EV fleet into the company’s airport operations, but these discussions remain early-stage with no clear resolution.
Despite the present difficulties, BluSmart’s stakeholders are optimistic that successfully resuming operations could still significantly restore the company’s valuation and attract strategic partnerships or investment from players like Uber, Adani, or Eversource Capital itself.
