Investors Plan $30 Million Revival for BluSmart Amid Leadership Changes
Investors are considering a $30 million unsecured debt injection to revive BluSmart, the Indian EV cab startup that halted operations last month. The funding depends on co-founder Anmol Singh Jaggi resigning amid corporate governance probes. The move aims to clear liabilities, including unpaid employee salaries and dues, and restart services to protect the fleet and drivers. Strategic buyers like Eversource Capital and Adani Group have shown interest, but challenges remain in governance and valuation.
BluSmart, an Indian electric vehicle (EV) cab-hailing startup, abruptly halted operations last month, leaving its 600 employees unpaid and stranding approximately 8,700 EVs in its fleet. The suspension followed a probe into Gensol Engineering, the primary EV lessor linked to BluSmart through co-founder Anmol Singh Jaggi, raising concerns over corporate governance and operational liabilities.
In response, a consortium of existing investors, including BP Ventures and ResponsAbility, is considering injecting $30 million in unsecured debt to address these liabilities, such as pending employee salaries and other dues. This financial rescue plan is contingent on the resignation of co-founder Anmol Singh Jaggi, who has verbally agreed to step down from the board pending assurances against future legal action.
The investors aim to restart BluSmart’s operations within three weeks to prevent further deterioration of the EV fleet’s battery health and to provide relief to drivers, some of whom have protested the suspension. Meanwhile, Delhi-based Evera Cabs has leased 500 of BluSmart’s EVs and plans to add 1,000 more, offering temporary employment opportunities to affected drivers.
Despite these efforts, BluSmart faces significant challenges, including ongoing probes by the Indian corporate affairs ministry into governance issues and the indirect impact of investigations into Gensol Engineering. Additionally, the resignation of Jaggi remains uncertain, as regulatory orders apply to Gensol but not directly to BluSmart, a private company.
Strategic investors have shown interest in acquiring BluSmart. Climate fund Eversource Capital proposed a merger with its B2B fleet operator Lithium Urban, though the offer was declined due to a steep valuation cut. The Adani Group has also expressed interest, particularly to integrate BluSmart’s fleet into its airport operations, leveraging its existing partnership with Uber.
BluSmart’s investors are optimistic that a successful restart will position the company to attract further strategic investments and partnerships, potentially revitalizing the Indian EV cab-hailing market. The situation underscores the complexities startups face in governance, funding, and operational sustainability within emerging sectors.
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