BluSmart Mobility, once heralded as India’s answer to sustainable urban transportation, has fallen from grace in a spectacular fashion. Launched in 2019, the electric vehicle (EV) ride-hailing startup promised a cleaner, more reliable alternative to ride-hailing giants like Uber and Ola.
With a fleet of electric cabs, a commitment to zero cancellations, and a customer-centric approach, BluSmart quickly gained a loyal user base in cities like Delhi-NCR, Bengaluru, and Mumbai. By mid-2024, it was celebrating milestones like 25 million trips and an annualized revenue run-rate of ₹790 crore. Yet, by April 2025, BluSmart’s operations screeched to a halt, its app stopped accepting bookings, and its users were left stranded, grappling with inaccessible wallet balances and canceled rides.
The company, once a darling of investors and commuters alike, now faces allegations of financial misconduct, regulatory scrutiny, and a potential pivot to a fleet partner for Uber. This article delves into the multifaceted reasons behind BluSmart’s downfall, exploring its business model, financial missteps, governance failures, and the broader implications for India’s startup ecosystem.
The Rise of BluSmart: A Vision for Sustainable Mobility
BluSmart was founded by Anmol Singh Jaggi, Puneet Singh Jaggi, and Punit Goyal with a bold vision: to disrupt India’s ride-hailing market with an all-electric fleet. Unlike Uber and Ola, which rely on driver-owned vehicles and an asset-light model, BluSmart took a different approach. It leased EVs, primarily from Gensol Engineering Ltd., a renewable energy company also founded by the Jaggi brothers.
This allowed BluSmart to control vehicle quality, driver training, and customer experience, positioning it as a premium, eco-friendly alternative. The company operated its own charging infrastructure and employed drivers directly, ensuring predictable earnings and reducing cancellations—a major pain point for users of competitors.
By 2023, BluSmart had raised over ₹985 crore from investors, including BP Ventures, Mayfield India Fund, and cricketing legend M.S. Dhoni. A $24 million investment from a Zurich-based climate finance firm in 2023 further bolstered its ambitions. The company’s fleet grew to over 8,600 EVs, and it completed millions of trips with a gross revenue of ₹176 crore in Q3 FY2024. BluSmart’s promise of reliability, safety, and sustainability resonated with urban professionals, particularly in Delhi-NCR and Bengaluru, where it became a go-to service for airport runs and office commutes. Social media platforms like LinkedIn and X buzzed with praise for its punctual drivers, clean vehicles, and transparent pricing.
Cracks in the Foundation: A Flawed Business Model
Despite its early success, BluSmart’s business model was inherently capital-intensive. Leasing thousands of EVs from Gensol and other providers like Energy Efficiency Services Ltd. (EESL) exposed the company to significant financial risk. Unlike Uber and Ola, which offload vehicle ownership costs to drivers, BluSmart bore the burden of lease payments, maintenance, and charging infrastructure. This asset-heavy approach required substantial capital to scale, and the company’s losses ballooned, reportedly reaching ₹215 crore in FY2023, nearly three times the previous year’s figure.
The close relationship between BluSmart and Gensol, both controlled by the Jaggi brothers, raised early concerns about corporate governance. Gensol, a publicly listed company, secured government-backed loans totaling ₹977.75 crore from the Indian Renewable Energy Development Agency (IREDA) and Power Finance Corporation (PFC) between 2021 and 2024 to purchase 6,400 EVs for BluSmart’s fleet. However, BluSmart remained a private entity, meaning Gensol’s public investors did not directly benefit from its growth. Transactions worth over ₹148 crore between Gensol and BluSmart’s subsidiaries in FY2024 fueled suspicions of preferential pricing and lack of transparency, as Gensol’s annual reports claimed these deals were at “arm’s length” without disclosing detailed terms.
The Financial Storm: Allegations of Fund Misuse
The turning point came in early 2025, when allegations of financial misconduct surfaced. In February 2025, BluSmart defaulted on a ₹30 crore payment for non-convertible debentures, only settling it after a delay. Around the same time, reports emerged that Gensol had misled credit rating agencies like CARE and ICRA, leading to a downgrade of its debt to default status. By April 15, 2025, the Securities and Exchange Board of India (SEBI) launched a formal investigation into Gensol and its promoters, Anmol and Puneet Singh Jaggi, for diverting ₹262 crore in loans meant for EV purchases.
SEBI’s findings were damning. Of the ₹977.75 crore raised by Gensol, ₹663.89 crore was allocated for 6,400 EVs, but only 4,704 vehicles were acquired at a cost of ₹567.73 crore, leaving ₹96 crore unaccounted for. The investigation revealed that funds were misused for extravagant personal expenses, including a luxury apartment in Gurugram’s DLF The Camellias complex, imported golf clubs worth ₹26 lakh, and foreign exchange violations totaling ₹1.86 crore. A ₹71.39 crore loan from IREDA was allegedly routed through a vehicle supplier to a Jaggi-linked company, ultimately funding the apartment purchase. Other transactions included ₹6.2 crore transferred to Anmol Jaggi’s mother and payments for luxury jewelry. SEBI barred the Jaggi brothers from accessing the securities market and holding key management roles at Gensol, citing a “governance breakdown.”
The fallout was immediate. Gensol’s stock price plummeted, and a proposed deal to sell 3,000 EVs to Refex Green Mobility to reduce its ₹470 crore debt to IREDA fell through. BluSmart’s operations were severely disrupted, with services halted across Delhi-NCR, Bengaluru, and Mumbai by April 17, 2025. Users reported canceled bookings and inaccessible wallet balances, with some claiming losses of up to ₹6,000. Social media erupted with frustration, as customers demanded refunds and lamented the loss of a trusted service.
Operational and Customer Service Failures
Beyond financial woes, BluSmart’s operational cracks had been visible for some time. A 2022 LinkedIn review highlighted issues with vehicle maintenance, outdated navigation systems, and poor customer support. Users complained about older EVs (number plates 13XX or 14XX) making high-pitched noises and being in poor condition. In one case, a rider was overcharged ₹400 due to a navigation glitch that failed to update a skipped stop, requiring hours of follow-up to resolve. A 2024 incident reported by Licence to Drive exposed safety concerns, with a passenger enduring a ride in a faulty EV with exposed wires and untrained driver response. The company’s redressal system was described as “broken,” with no follow-up after serious complaints.
These incidents underscored BluSmart’s struggle to maintain service quality as it scaled. While its in-app algorithm and EV hubs aimed to optimize pickups and reduce cancellations, the lack of on-demand booking options and reliance on advance scheduling frustrated users. The company’s premium pricing, justified by its eco-friendly model, became a liability when service reliability faltered.
The Pivot to Uber: A Desperate Survival Strategy?
Amid mounting financial and regulatory pressure, reports emerged that BluSmart was transitioning its fleet to operate as a partner for Uber, effectively exiting its direct ride-hailing business. Sources indicated that shareholders had approved moving 700–800 vehicles to Uber’s platform, with the potential for further integration. This pivot, reported by The Economic Times and Republic World, marked a significant departure from BluSmart’s original vision of competing with Uber as an independent player. The move was seen as a survival strategy to salvage its fleet and mitigate losses, but it raised questions about the future of its brand and customer trust.
Analysts argue that integrating with Uber could dilute BluSmart’s unique value proposition. Its loyal user base valued its no-surge pricing, clean vehicles, and disciplined drivers—qualities that Uber’s aggregator model might not replicate. As Avik Chattopadhyay, co-founder of Expereal, suggested, Uber could create a premium “Uber Blu” segment to preserve BluSmart’s brand equity, similar to Uber Black. However, without clear communication from BluSmart,_picker: Blusmart was a beacon of reliability and sustainability, but its sudden collapse has left commuters and investors questioning the viability of such models in India’s competitive ride-hailing market.
Broader Implications: A Wake-Up Call for India’s Startup Ecosystem
The BluSmart-Gensol scandal is not an isolated case but part of a broader reckoning in India’s startup ecosystem. As Union Minister Piyush Goyal emphasized at Startup Mahakumbh 2025, accountability and corporate governance are critical for sustainable growth. The simultaneous unraveling of BluSmart and other high-profile startups like Byju’s highlights the risks of unchecked founder control, inadequate due diligence by investors, and weak regulatory oversight. Posts on X reflect public sentiment, with users like
@ManojVaneeta calling it “designed misappropriation” and @tejasag9 criticizing the founders’ silence.
The crisis underscores the need for stronger internal controls, transparent financial reporting, and independent audits in startups. Companies like Zerodha and Freshworks, known for ethical practices, serve as benchmarks for balancing growth with governance. For BluSmart, the path forward remains uncertain. While its operating model still holds value, rebuilding trust will require addressing refund demands, resolving regulatory issues, and clarifying its strategic direction.
BluSmart’s collapse is a cautionary tale of ambition undone by mismanagement and greed. Its innovative model—electric vehicles, zero cancellations, and premium service—offered a glimpse of a sustainable future for urban mobility. However, a capital-intensive business model, intertwined corporate structures, and egregious financial misconduct derailed its promise. As BluSmart navigates an uncertain future, possibly as a fleet partner for Uber, its downfall serves as a stark reminder that innovation must be underpinned by integrity. For India’s startup ecosystem, the lesson is clear: without robust governance and accountability, even the brightest visions can crash and burn.