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India’s Uber-rival BluSmart pumps up EV charging with $25M investment


BluSmart, an Indian ride-hailing startup that competes with Uber and homegrown rival Ola with its all-electric fleet, is looking to boost its battery charging infrastructure as the South Asian nation currently has limited charging stations but aims to expand its electric vehicle (EV) base.

The Gurugram-based startup has received fresh funding of $25 million from Switzerland-headquartered impact fund ResponsAbility in a mezzanine structure, including partial equity dilution and debt. The purpose of raising this capital — just in a month following a rights issue of $24 million and a few months after another rights issue of $42 million — is to expand the EV charging infrastructure from the current 35 stations, which operate 4,000 chargers in total, to about 95–100 stations in the next few months.

Launched in December 2019, BluSmart currently has a fleet of 6,000 EVs, including around 180 ZS SUVs from MG Motor and the rest of the sedan Tata Tigor cars, which it plans to take to 10,000 later this year. But for that expansion, the startup initially needs to bolster its EV charging infrastructure. The expansion in the charging infrastructure will also help BluSmart generate additional revenues as it looks to open its charging hubs to the public in the future to leverage the country’s plan to electrify 30% of all its four-wheelers by 2030.

“This $25 million should help us expand the charging infrastructure from 35 super hubs we have right now to maybe another 60 charging hubs,” BluSmart co-founder Anmol Jaggi told TC.

Jaggi co-founded BluSmart along with his brother Puneet Jaggi and another co-founder, Punit Goyal, in 2019 to take on the duopoly of Uber and SoftBank-backed Ola. It began operating shortly before the global COVID-19 lockdown, severely affecting businesses worldwide and devastatingly impacting ride-hailing services. The startup gained public attention following the ease of the initial lockdown for offering a premium service — months after launching its all-EV fleet in Delhi-NCR. In 2022, BluSmart expanded to Bengaluru and introduced intercity rides from Delhi-NCR within a 62-mile range to cities including Chandigarh and Jaipur.

Unlike Uber and Ola, which both offer on-demand cabs in India, BluSmart provides electric vehicle (EV) rides only with scheduling in advance. While this is a significant departure from the norm, BluSmart has no plans to change this model as it requires many more EVs in its fleet to enable the on-demand service.

Nonetheless, the distinct model, which requires effort from riders to schedule and wait for their cabs to come, has drawn some adoption.

Between 2022 and 2023, BluSmart, which raised a total of $200 million in equity and debt to date and separately received EV asset financing of $200 million, saw its gross merchandise value grow by over 600% to about $20 million from $2.76 million. The startup also saw over 100% growth in monthly active users to 245,000 in December from 120,000 in January last year. It counts BP Ventures, Mayfield India Fund, Green Frontier Capital and Survam Partners, among its early backers.

In November, BluSmart introduced a loyalty program called BluElite to offer value additions, such as additional waiting time and recurring rides, to riders for paying a subscription of $6 a month or $31 a year. It garnered between 2,000–3,000 subscribers in two months after launch and is contributing to the startup’s bottomline.

However, BluSmart is facing the heat due to the ongoing market slowdown and its asset-heavy business model. In 2019, the four-year-old startup announced its plans to raise $250 million in a new round. But that did not work out. It also lost the initial shine of being an EV ride-hailing platform, as Uber partially started onboarding electric cabs in India to support the government’s objective of going electric.

Recently, BluSmart introduced its crowdfunding initiative called BluSmart Assure and “rush-hour” pricing, similar to Uber’s surge pricing during rush hours, despite promising that it would never introduce a surge pricing on its platform. These moves even attracted criticism for the platform.

In a wide-ranging interview with TC, Anmol Jaggi and BluSmart chief business officer Tushar Garg, who has also become the CEO of BluSmart’s charging business BluCharge, talked about how they are planning to go with the fresh capital and looking at the challenges on their journey.

Below are the edited excerpts from the conversation:

TC: How are you planning to utilize the fresh capital?

Anmol Jaggi: This money is majorly going to strengthen our EV charging infrastructure. For cars, we have a lot of leasing partners who are there, and those leasing partners are already giving us 1,000s of cars. We have already scaled to 6,000-plus cars — 5,000 in Delhi-NCR and 1,000 in Bengaluru. So, for cars, we are decently sorted with our financing. This money will essentially go all for building charging infrastructure.

Tushar Garg: BluSmart has always taken pride in the fact that we are a full-stack EV mobility player. We’ve got a lot of crazy hard work done by the teams in the background to ensure adequate funds are available for our expansion on the fleet side. We’ve also always been required to build a very large-scale EV charging infrastructure. With this capital coming in with ResponsAbility, our focus is to build vast amounts of EV charging infra for our fleets and eventually the public.

Are you planning to expand the capacity of the 35 charging locations you have or widen your infrastructure by entering new locations?

AJ: We can’t expand the capacity in these 35 charging locations because they are already filled to the brim. This money could create 60 such locations so that our total EV charging station count could go to 95.

TG: We used to dream of creating an EV charging distribution in the cities we operate in, where every car can get a charging point within 15 minutes of wherever they are. This capital allows us to go from those 35 hubs to maybe 95 or 100 odd hubs and obviously come closer to that dream of ours of making an EV charging point available to any electric vehicle in the city within a 15-minute drive — or maybe even less — in the times to come.

You announced plans to have a fleet of 10,000 EVs by March 2024. And you just mentioned that you have 6,000 cabs at the moment. What has been the progress toward that target?

AJ: We have 6,000 cars already plying, and as we speak, 700 vehicles are ready to join our fleet in the next 10 odd days. So, we will hit 6,700. Perhaps by March 2024, we should be more or less between 7,500 and 8,000 cars.

What is the new timeline for reaching 10,000 fleet size?

AJ: By something like July, we will hit the 10,000 number. But everything is subject to the charging infrastructure expansion.

What is the reason you could not meet the target of getting 10,000 cabs by March 2024?

AJ: It is a fact that we have not been able to ramp up the charging infrastructure to the speed that we wish to. Whether it is financing for cars or Tata Motors’ ability to give us these cars, both are available. So, here, the lead dog is the charging infrastructure. As we build out the charging infrastructure, we will be able to absorb more cars. In fact, in January itself, we are onboarding five new charging hubs: two in Rajouri Garden, one in Dwarka (in Delhi), and two in Bengaluru. This would enable us to onboard 700 more cars because each has between 100 and 150 car parks.

Are any of the cabs that BluSmart currently runs on its books?

AJ: No, the fleet is not at all — not even one car — is on the books of BluSmart. All the vehicles are leased out to BluSmart by many partners. In fact, we started a retail program called BluSmart Assure in which any individual can lease out a car to BluSmart, and we have a fantastic response to it.

What is the average leasing tenure?

AJ: The average tenure for the Tata Tigor car would be four and a half years, and for the MG Zs SUV, it is about five and a half years.

Will you purchase the vehicles after the leasing period is over?

AJ: BluSmart has a roofer to purchase these vehicles. So, if it feels that at the end of the lease period, it wants to buy back the car at a predetermined price, BluSmart can buy the vehicle.

Have you repurchased any of these leased vehicles?

AJ: If you look at the history, we have had a few of our cars where the lease has started to go over. Depending on that, we have returned a few and a little above 40 we have bought from the lessor and retrofitted their batteries.

Is BluSmart unit economics positive now?

AJ: No, we are negative. Our contribution one margin is positive, which means that we are profitable on the part of all our variable costs, such as driver salaries and electricity costs. But when it comes to the contribution two margin, which basically includes the lease of the vehicle, we are negative. However, our SUV rides have the contribution two margin positive.

What is the loss you are making per cab daily?

TG: We are negative, equivalent to one and a half trips. A trip on an average fare is about $5 (400-plus Indian rupees). So, the loss we are making is about $7 (600 Indian rupees) per cab per day.

How much are you paying for the maintenance and service of your vehicles? You also mentioned you retrofitted the batteries in some of the cabs you have bought. How much have you paid for that?

AJ: The retrofitment of the battery cost us about $3,100 (260,000 Indian rupees). Maintenance and servicing costs are about a cent (80–85 paisa) per kilometer without tires. If we add tires to it, it comes to $0.014 (1.15 Indian rupees) per kilometer.

What is the percentage of the revenue contribution from SUVs?

AJ: It is double. So, if we have 3% of the fleet as premium (SUV), it will be 6% of revenue.

What has been the initial outcome of BluSmart Assure? Will it not be a debt trap for people investing since there is no clarity on how BluSmart would pay them the guaranteed returns despite seeing losses?

AJ: We pay more than $1.8 million in lease rentals every month. So, there is sufficient equity that the business has to continue. We have already added more than 150 vehicles under the BluSmart Assure. The ticket size is about 10 cars per person, so 17–18 different investors are already through the program. We aim to add 2,000 more vehicles through it in the next three to four months. So, you could expect many new cars for us to come under the BluSmart Assure program. There is massive demand for people looking to deploy vehicles with BluSmart because they know that their cars will be very well looked after, and every new vehicle that comes onto the platform helps us grow, increase the network and become more profitable.

Our expected loss for the financial year 2025 is about $19 million. Do we have enough and more equity to cover that loss? Yes. Are we raising more equity? Yes. Are more and more international investors happy to fund us? Yes. So, people investing in the BluSmart Assure program are considering that BluSmart has already captured a 10% plus market share in Delhi and maybe 12–13% revenue market share. They believe the founders have a great track record, the team and product have proven themselves, and substantial investor backing has always come in.

What does BluSmart’s runway look like?

AJ: It’s more than two years with the current ResponsAbility money.

In 2022, you announced plans to raise around $250 million. But you ended up getting $42 million in a rights round in May, including $5 million in debt, and $42 million in another rights issue in December. Why has it become so hard for BluSmart to raise funds despite its cab plying in two major cities?

AJ: On that $250 million announcement, it has been close to 18 odd months of that falling through, so we lived through it. We have made enough clarifications to say that the incoming investors and existing investors could not agree on the terms and conditions of the round, and hence, we could not close it despite having term sheets. It is better to not align in the earlier part than to have a conflict in the later part. The $250 million would have been great. We would have been on a very different trajectory with that amount in the bank. That said, we are constantly raising money, and maybe it’s not that big a sum of $250 million, but it is decent to let us continue our operations and growth.

BluSmart has been growing more than 100% year-on-year, which has all been fueled by the $42 million, $24 million and the latest $25 million. So, there are no hard feelings that we could not get the $250 million. It would have been better. But do we have enough money with us? Yes. Are we growing? Yes. Does the customer love continuing? Yes.

But why aren’t any storied investors coming to your captable?

AJ: ResponsAbility is absolute as a fabled investor as one could get. But regarding the earlier $42 million and $24 million we raised, we have had the privilege of creating capital for myself and other businesses. If I have my own money available at my disposal, I will be happy to invest more money into BluSmart. So, I would not rule out doing more rights rounds to increase my share in the business.

How much have you invested in BluSmart so far?

AJ: The three co-founders — me, Puneet Jaggi, and Punit Goyal — hold nearly 35% of BluSmart. I have invested about $25 million, while Punit has invested about $4 million and CXOs, comprising Anirudh Arun (operations and marketing head), Rishabh Sood (CTO) and Tushar have put in a total of $2.4 million.

Have you attracted new investors’ interest?

AJ: Sometime in the middle of the year, we will again start with the next fundraising and use the six months to improve our numbers. Use the six months to take the revenue run rate from $53 million that we had in December to, let’s say, $75 million and use that to decrease the losses from about $7 to maybe $5 per car daily and demonstrate all of that show the trajectory and hopefully, ResponsAbility got convinced, so we’ll have more other people also getting convinced. And, of course, we always have our own money at our disposal.

BluSmart started with no-surge pricing as a significant competitive edge against Uber and Ola. But then, earlier this month, you introduced the “rush-hour” pricing. Why did you prefer that change, which has made BluSmart a bit similar to its competitors?

AJ: We were getting a lot of complaints from driver partners that they could not complete the rides during the rush hours. That resulted in a dip in their earnings because they could not complete as many trips as possible. So, we found “rush-hour” pricing as a fair way of compensating the driver partners for their effort and nothing else. We are clearly different regarding surge and rush-hour pricing; it is not arbitrary that you could see any random number coming up any day. We have clarified that we’ll be 10–15% more expensive during rush hours. And it is only for a defined hour. In fact, during the non-rush hours, we also decrease the prices. Since the launch on January 9, we have seen a 7–8% increase in the number of trips we are doing.

Would you introduce some other future changes that customers could criticize, similar to what Uber and Ola have faced, including random cancellations?

AJ: We are always going to follow the zero-cancellation model. Clean cars and an all-electric fleet will also always be a part of our offerings. The rush-hour pricing is something that we have done as a fair move for our driver partners. If there are no driver-partners, there will be no BluSmart.



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