BluSmart Delays Salaries Citing Cash Flow Issues: Report

BluSmart Mobility has reportedly delayed salary payments for the month of March as the electric cab-hailing startup grapples with a financial crisis.

In an email to the employees, cofounder Anmol Singh Jaggi has assured that all the pending dues will be cleared by the April end, the Morning Context reported.

“Due to current cash flow constraints, there will be a short delay in processing salaries. However, we want to assure you that all dues will be cleared within the month of April itself,” Jaggi said in the mail.

“To ensure fairness and sensitivity to those who may be more impacted, we will be releasing salaries in phases—starting from the lowest pay grades and moving upwards,” he added.

Inc42 has reached out to BluSmart for comments on the development. The story will be updated  based on the response.

Founded in 2019 by Jaggi and Punit K Goyal, BluSmart offers EV ride-hailing services and charging infrastructure across Delhi NCR and Bengaluru. It expanded its services to Mumbai in January this year, and also had a presence in Dubai.

Mounting Troubles For BluSmart

Weeks ago, Refex Industries terminated its deal to acquire 2,997 electric vehicles from Gensol Engineering.

In January, Gensol’s EV financing arm Gensol EV Lease Pvt Ltd agreed to sell 2,997 EV cars, which were leased initially to BluSmart, to Refex’s subsidiary Refex Green Mobility Limited (RGML). 

Prior to that, reports surfaced that Uber was in early talks to acquire BluSmart, which was again denied by the latter about any negotiations.

The startup’s Dubai operations were also reportedly shut down in mid-March, while its plans of expanding its services in Saudi Arabia aborted.

The reports further revealed there have been top-level exodus in BluSmart, as of March this year. Chief executive officer Anirudh Arun, chief business officer Tushar Garg, chief technology officer Rishabh Sood, and vice president Priya Chakravarthy have all exited. Nandan Sharma, who was earlier a vice president, will be taking over as the chief executive officer. 

To add to that, BluSmart reportedly defaulted on INR 30 Cr of bonds in early February, during which the company denied issues of cash crunch and confirmed that it is set to build a strong brand supported by strategic expansion, increasing focus on premium offering, and expanding user base.

Since its inception, BluSmart has raised $180 Mn in a mix of debt and equity funding rounds till date, from investors such as bp Ventures, Venture Catalysts, Green Frontier Capital, responAbility and Deepika Padukone, among others.

In terms of financial performance, the company reported its operating revenue rose more than 245% to INR 13.84 Cr in the year ending March 31, 2023, from INR 4.01 Cr in FY22.

Meanwhile, BluSmart also narrowed its loss to INR 14.89 Cr in FY23, a decline of almost 58% when compared to a loss of INR 35.37 Cr from the previous year.