Blusmart drives a green agenda

The recipient of bp Ventures’ first investment in India, the integrated EV ride-hailing company hopes to expand its presence from its core National Capital Region base

If Ola and Uber changed the way we hailed taxis, Gurugram-based Blusmart wants to make ride-hailing a green option.

The company, which recently raised $25 million from a clutch of investors led by bp Ventures and which included Mayfield India Fund, 9Unicorns and Survam Partners, is India’s first integrated EV ride-hailing and charging company. The company declined to comment on bp’s stake. Sources said that the 10-year-old corporate venture arm of London-headquarted bp now holds a significant minority stake in Blusmart.

Blusmart is unlike some of the popular app-based ride-hailing businesses. Though it resembles Us-based Revel and Alto in terms of having only EV fleets — about 700 now and adding 200 every month — the way it owns the vehicles and manages drivers on its platform is unique in India. First, the business model is asset-light: All its EVS are on lease, from either high-net-worth individuals or companies that have brought them, and it pays the owners a monthly fee of ~20,000-25,000. Two, these cars are sub-leased to drivers, or drive-partners, as the company likes to call them. Unlike the Ola-uber model in India, drivers do not own the cars, they just have to drive and they are paid based on the number of hours, trips and quality ranking feedback.

At Blusmart the driver-partners drive in six-hour slots, and they can choose a maximum of two slots a day. For each of these slots, the driver partners get a fully-charged EV and access to the Blusmart platform. So they pay for the lease for each of the six-hour slots that they drive, which add up to the monthly lease amount that Blusmart further pays to its asset lessor. The driver-partners take home ~18,000-20,000 a month without the burdens of asset ownership.

When asked how Blusmart makes money, Tushar Garg, co- founder and chief business officer, said: "Our revenue model has customers paying for the rides they take with us. Of this revenue, there is a part share that Blusmart gets as a fee paid by drivers to Blusmart for the platform."

But Blusmart has also gone in for backward integration, creating EV charging stations or what it calls “super-hubs” that can charge almost 70-80 EVS at a time. So far the company has set up seven super hubs in the Delhi-national Capital Region (NCR). In early September, Blusmart signed an agreement with Jio-bp, the fuels and mobility partnership between Reliance Industries and bp. It was via this tie-up with Jio-bp that Blusmart was able to tie up an investment of $13 million from bp Ventures. For bp this is its first investment in India, although it has invested almost $800 million so far.

Blusmart claims that unlike the two popular ride-hailing services in the country, it does not want to get into the surge-pricing kind of offering. Asked if its model is investmentintensive, Anmol Singh Jaggi, founder and CEO, pointed out that the cost of operating and owning a vehicle with a conventional internal combustion engine is much higher than an EV.

For instance, a diesel car that runs on a fuel that costs roughly ~100 per litre gives an average of 15 km, which works out to ~6-6.50 a km; in EVS that cost is 1.50 paise. Plus hardware costs are down too. “When we started the business in 2019, an EV would cost around ~13.5 lakh. Today that price has come down to ~9.5 lakh,” Jaggi pointed out.

“Second, the highest cost is lease cost and third is the driver-partner cost. Our driver- partners compared to others in the same segment make the same money without the hassle of asset ownership,” he added.

Blusmart has five cofounders with backgrounds in renewable energy, raid-hailing, pharma and sports tech. Jaggi, who is the common thread between all the founders, is a first-generation entrepreneur who founded Gensol, a renewable power services company in 2007. The company is listed on the Bombay Stock Exchange and has revenues in excess of $25 million annually. It currently trades at ~90. Jaggi is an alumnus of University of Petroleum and Energy Studies, Dehradun.

Co-founder Punit Goyal is into renewable energy as well. He founded PLG Power, an early entrant in solar panel manufacturing. He also founded PLG Photovoltaic in 2010, which set up one of the first 20 Mw solar power plants in India in 2012, which he sold in 2014 for $68 million. Goyal also co-founded PLG Clean Energy which developed a 70 Mw solar asset with Suzlon.

Garg was a founding team member of Uber India & Asia and led their strategy and operations in India. He also cofounded Skedusoft.

The other team members are Anirudh Arun, chief operating officer, Rishabh Sood, chief technology officer, and Rahul Jain, chief financial officer. They were founders at Khelfie, a sports tech platform, which they exited in 2019. The first two are from IIT Roorkee and Jain has 15 years of experience in the pharmaceuticals industry.

Since the company was founded in 2019, it has been able to raise one round of funding every year. Jaggi said the latest round of $25 million will be used for expansion. The company says the Delhi-ncr is a huge market to capture. NCR accounts for 20 per cent of India’s mobility market. In the next two years, it intends to expand to six cities.

The business is growing quickly in Delhi-ncr. Blusmart estimates it has already saved approximately 1,500 tonnes of CO2, with more than 650,000 passenger trips completed to date.

Jaggi is serious about his bet of creating a large Ev-focused ride-hailing business that not only helps reduce carbon footprint but also makes a business case. The company has already faced two zero-revenue phases owing to the pandemic, but that has not deterred the founders yet.

As Jaggi said, “We started with 70 cars and one super-charging hub. I believe it is only technology that can reduce any cost drastically. We have seen this in the telecom industry, I think EV and its rising adoption will be another moment and we want to be the first players in this space.”

Blusmart has also gone in for backward integration, creating EV charging stations or what it calls “super-hubs” that can charge almost

70-80 EVS at a time