BluSmart Mobility, an Indian ride-hailing start-up that uses only electric vehicles, has raised $42 million as it intensifies its battle against the two dominant operators, Uber Technologies Inc. and Ola Cabs.
Investors include BP Ventures, the investment arm of energy giant, BP Plc, which holds 20% equity. BluSmart is currently valued at $250 million, its co-founder Anmol Jaggi told Bloomberg News, and the founders too participated in the current round.
The start-up, headquartered in Gurgaon outside New Delhi, was established in December 2019 by Jaggi and four others with the idea of bringing a new, greener ride-hailing option to the massive Indian market. It raised $109 million across its seed and Series A rounds.
But in a matter of months, Covid-19 put the brakes on almost all such services. The market is now recovering, and the start-up has expanded to cover Delhi and Bangalore.
While Ola and Uber have integrated some electric vehicles into their large fleets, Jaggi sees an opportunity in providing customers with EVs exclusively. He thinks electric vehicles can generate better income for drivers and the platform, while providing clean and reliable rides to users.
“Uber and Ola aren’t doing justice to their customers or drivers,” said Jaggi. “Those platforms are losing money, their business doesn’t have unit economics.”
He’s getting some traction. Revenue has tripled over the last three quarters, the start-up said in the funding announcement on Thursday.
BluSmart finances drivers’ cars, sets up electric charging infrastructure working with partners, and is also getting involved in electric-car manufacturing with partner, GenSol Engineering Ltd.
It will use the latest round of capital to penetrate deeper into major cities and more than double its fleet to 10,000 over the next year.