BluSmart’s $30 Mn Lifeline: Can Investors Save 10,000 Jobless Drivers?

BluSmart’s investors, including BP Ventures and ResponsAbility Investments, are planning a $30 Mn infusion to revive the struggling EV ride-hailing startup, which halted operations in April 2025, leaving 10,000 drivers jobless. This article explores the reasons behind BluSmart’s collapse, the proposed funding plan, its potential impact on drivers and employees, and the challenges ahead. We’ll dive into the company’s journey, the fraud allegations against its founders, and how this investment could reshape its future in India’s competitive ride-hailing market.

The Fall of BluSmart: What Went Wrong?

BluSmart’s journey started with a bold vision in 2019. Founded by Anmol Singh Jaggi, Puneet Singh Jaggi, and Punit K Goyal, the Gurugram-based startup aimed to revolutionize India’s ride-hailing industry with an all-electric fleet. With over $168 Mn raised across 14 funding rounds, BluSmart’s eco-friendly cabs became a hit in Delhi NCR, Bengaluru, and Mumbai. But in April 2025, everything came crashing down.

The trouble began when the Securities and Exchange Board of India (SEBI) accused the Jaggi brothers of diverting ₹400 Cr ($47 Mn) from Gensol Engineering, a related entity, for personal expenses, including a luxury flat. This led to SEBI barring the founders from directorship roles and ordering a forensic audit. BluSmart’s operations were abruptly suspended on April 17, 2025, when drivers received a “Return to Hub” message on their apps. The sudden shutdown left 10,000 drivers jobless and 800 employees unpaid since March, sparking protests and despair.

At Startup INIDAX, we’ve been tracking BluSmart’s rise and fall closely. The startup’s collapse wasn’t just a financial blow—it was a betrayal of trust for thousands of drivers who relied on the platform for their livelihood. Fraud allegations, coupled with governance lapses, have put BluSmart in a precarious position, raising questions about its future.

10,000 Drivers Jobless: The Human Cost

The human toll of BluSmart’s collapse is staggering. Nearly 10,000 drivers, many of whom are sole breadwinners for families of five or more, were left without income overnight. One driver, speaking at a protest in Delhi’s Pitampura, described the shutdown as “a kick in the gut for at least 50,000 people.” Another driver, who had been with BluSmart for three years, shared his struggle to pay his children’s school fees of ₹10,000, highlighting the financial strain faced by many.

On May 4, 2025, over 1,000 drivers gathered at Jantar Mantar in New Delhi to protest, demanding government intervention. Some even suggested that the government’s upcoming Sahkar Taxi initiative could take over BluSmart’s operations to restore their jobs. The drivers’ plight has drawn attention to the vulnerability of gig workers in India’s startup ecosystem, where sudden closures can leave thousands in limbo.

Startup INIDAX spoke to industry experts who emphasized the need for stronger protections for gig workers. “When platforms like BluSmart shut down, drivers are left with no safety net,” said a Delhi-based policy analyst. The protests underscore the urgency of addressing the fallout, especially as BluSmart’s 8,700 EVs remain abandoned, risking battery degradation and further losses.

BluSmart’s $30 Mn Revival Plan

Hope may be on the horizon. According to TechCrunch, BluSmart’s investors, led by BP Ventures and ResponsAbility Investments, are planning a $30 Mn infusion to revive the startup. This funding, structured as unsecured debt, aims to clear pending dues, including ₹500-600 Mn owed to employees, and restart operations. However, there’s a catch: the deal hinges on co-founder Anmol Singh Jaggi resigning from the board.

The proposed investment has sparked cautious optimism. If successful, it could bring BluSmart’s blue-and-white electric cabs back to the streets, saving jobs and protecting investors’ funds. Sources told Startup INIDAX that the funds will also address operational liabilities, such as unpaid salaries and creditor dues, which total around ₹2.5 Bn ($30 Mn). The resignation condition reflects investors’ desire to distance BluSmart from the fraud allegations and rebuild trust.

But will $30 Mn be enough? BluSmart’s valuation has already taken a hit, dropping from $300 Mn to a potential $120 Mn in a proposed acquisition by EverSource Capital. The new funding could stabilize the company, but it’s a fraction of the capital needed to scale back to its peak fleet of 8,500 EVs. For now, the focus is on survival, not expansion.

BP Ventures and ResponsAbility Investments: The Key Players

BP Ventures and ResponsAbility Investments are at the forefront of BluSmart’s rescue mission. BP Ventures, a long-time backer, holds a 20% equity stake and has been instrumental in BluSmart’s growth, leading multiple funding rounds since 2021. ResponsAbility Investments, a Switzerland-based climate finance firm, joined the fray with a $25 Mn investment in 2024, praising BluSmart’s EV ecosystem for its environmental impact.

These investors aren’t just throwing money at the problem—they’re betting on BluSmart’s potential to lead India’s electric mobility revolution. With 16 Mn electric trips and 500 Mn zero-carbon kilometers under its belt, BluSmart has a strong track record. BP Ventures and ResponsAbility see the $30 Mn infusion as a way to preserve this legacy while addressing the governance issues that derailed the startup.

Startup INIDAX reached out to industry insiders who noted that BP Ventures’ involvement signals confidence in BluSmart’s long-term value. “They’re not walking away despite the mess,” said one investor. “That’s a good sign for drivers and employees hoping for a comeback.” However, both firms declined to comment officially, leaving some uncertainty about the deal’s timeline.

Challenges Ahead for BluSmart

Reviving BluSmart won’t be easy. The startup faces a mountain of challenges, starting with its tarnished reputation. The fraud allegations and SEBI probe have shaken investor confidence, making future fundraising tricky. The Ministry of Corporate Affairs (MCA) has also ordered a probe into BluSmart’s governance practices, which could uncover more issues.

Operationally, BluSmart must address the condition of its 8,700 idle EVs. Prolonged inactivity risks battery damage, which could cost millions to repair. The startup also needs to rebuild trust with drivers, many of whom feel abandoned. Offering severance pay or rehiring incentives could help, but that requires additional funds.

Competition is another hurdle. Uber, Ola, Rapido, and newer players like Evera Cabs are vying for market share in India’s ride-hailing space. Evera recently leased 500 of BluSmart’s EVs, absorbing some of its drivers—a move that could weaken BluSmart’s position if it doesn’t act fast. Startup INIDAX analysis suggests BluSmart must differentiate itself, perhaps by doubling down on its premium, eco-friendly branding, to regain customers.

Can BluSmart Compete with Uber and Ola?

Before its collapse, BluSmart was a serious contender in India’s ride-hailing market. Its all-electric fleet, 4.9/5 app rating, and partnerships with Mahindra and Tata Power set it apart from Uber and Ola, which rely on mixed fleets. But the shutdown has given competitors an edge. Uber Green, Uber’s EV arm, is targeting 25,000 EVs by 2026, while Ola continues to dominate with its scale.

BluSmart’s $30 Mn lifeline could help it regain ground, but only if it moves quickly. The startup’s hub-to-hub model, which relies on proprietary charging infrastructure, is both a strength and a weakness. It ensures reliability but limits scalability due to India’s patchy EV charging network. To compete, BluSmart may need to open its 50 charging hubs to third parties, as it planned in 2024, to generate additional revenue.

Startup INIDAX believes BluSmart’s focus on sustainability could be its trump card. With India aiming for 30% EV penetration by 2030, BluSmart’s zero-emission model aligns with government policies. If it can restore operations and rebuild trust, it could carve out a niche as the go-to green ride-hailing platform.

What’s Next for BluSmart and Its Drivers?

The coming months will be make-or-break for BluSmart. If the $30 Mn infusion goes through and Anmol Jaggi steps down, the startup could resume operations by mid-2025. This would be a lifeline for 10,000 jobless drivers and 800 unpaid employees, many of whom are struggling to make ends meet. Protests may continue until concrete action is taken, but the funding proposal has given drivers a glimmer of hope.

For investors, the focus is on minimizing losses. EverSource Capital’s acquisition talks, valued at ₹800-1,000 Cr, are still on the table, but the board has resisted due to the steep valuation cut. The Adani Group also expressed interest in BluSmart’s fleet for airport operations, hinting at potential strategic partnerships.

Startup INIDAX will continue to monitor BluSmart’s progress, as its revival could set a precedent for how Indian startups navigate crises. For now, the priority is clear: get the cabs back on the road and the drivers back to work.

Conclusion: A Glimmer of Hope?

BluSmart’s $30 Mn lifeline from BP Ventures and ResponsAbility Investments is a bold attempt to resurrect a startup that once promised to redefine urban mobility. The road ahead is fraught with challenges, from governance probes to fierce competition, but the funding offers a chance to save 10,000 jobless drivers and restore BluSmart’s reputation. As India pushes for cleaner transportation, BluSmart’s all-electric model remains relevant. Whether it can rise from the ashes depends on its ability to execute swiftly and rebuild trust. Stay tuned to Startup INIDAX for the latest updates on this unfolding story.