Uber has begun early discussions to acquire BluSmart, an electric vehicle-based cab service company, as BluSmart’s parent company, Gensol Engineering, looks to exit the capital-intensive business. Sources revealed to Moneycontrol that Gensol is facing liquidity issues, prompting speculation about a possible acquisition. However, BluSmart has denied any such negotiations with Uber.
BluSmart’s Official Response
BluSmart strongly refuted the rumors of an acquisition. Responding to queries from Moneycontrol, a BluSmart spokesperson stated, “BluSmart categorically denies any discussions or negotiations regarding an acquisition by Uber. The report suggesting such a development is entirely speculative and unfounded. As India’s leading EV ride-hailing and charging infrastructure platform, BluSmart remains focused on scaling its operations, expanding its footprint, and driving sustainable mobility forward.”
Despite the denial, industry insiders continue to speculate about the potential deal, considering the financial strain on BluSmart’s parent company, Gensol Engineering.
Gensol’s Foray into EV Ride-Hailing
Gensol Engineering, a company primarily known for its solar engineering, procurement, and construction (EPC) business, ventured into the electric vehicle space through BluSmart. Launched in 2019, BluSmart positioned itself as a green alternative to Uber and Ola, offering fully electric cabs in the rapidly growing urban transport market.
BluSmart differentiated itself by offering premium, no-surge pricing services with cleaner and more sustainable transportation options. It focused on corporate customers and airport transfers in cities like Delhi-NCR and Bengaluru, ensuring a steady demand.
Financial and Operational Challenges
Despite its initial success, BluSmart has faced numerous financial and operational challenges. The high costs of fleet acquisition, EV charging infrastructure development, and driver incentives have weighed heavily on its finances. While the company has raised substantial investments from institutional backers like bp Ventures, profitability has remained elusive.
BluSmart owns and operates its fleet instead of relying on driver-owned vehicles, a model that significantly increases capital expenditure. Unlike competitors Uber and Ola, which primarily function as aggregator platforms, BluSmart’s asset-heavy approach requires constant funding for fleet expansion and maintenance.
Government subsidies and incentives for EV adoption have played a crucial role in BluSmart’s business model. However, delays in disbursing subsidies, along with rising financing costs for EV purchases, have added financial strain. Recent reports indicate that BluSmart has struggled to secure fresh funding, potentially prompting Gensol to reconsider its involvement in the business.
Uber’s Strategic Interest in BluSmart
Uber has remained tight-lipped about the potential acquisition, declining to comment on the matter. However, acquiring BluSmart would align with Uber’s broader strategy of expanding its EV fleet in India. The ride-hailing giant has already made significant investments in electric mobility, responding to growing regulatory and environmental pressures.
A successful acquisition would give Uber access to BluSmart’s ecosystem, including:
- A well-established EV fleet: With approximately 6,000 electric vehicles, BluSmart already has a significant presence in the Indian market.
- Charging infrastructure: BluSmart operates more than 4,000 EV chargers across 35 locations in Delhi-NCR and Bengaluru, a key asset for Uber’s expansion in the EV space.
- A premium customer base: BluSmart has built a strong reputation among corporate clients and airport travelers, segments that Uber seeks to grow in India.
If Uber proceeds with the acquisition, it could leverage BluSmart’s infrastructure while optimizing operations with its superior technology and scale.
BluSmart’s Growth and Fundraising Efforts
BluSmart has made significant strides since its inception. In 2024, the company raised approximately $24 million from existing investors, including bp Ventures, as well as contributions from its founders and leadership team. To date, BluSmart has secured a total of $109 million across its seed and Series A funding rounds.
The company claims to have surpassed a $50 million annual revenue run rate, growing at over 100 percent year-on-year. Despite these achievements, maintaining financial sustainability has remained a challenge, especially in a competitive landscape dominated by Uber and Ola.
The Road Ahead
If BluSmart continues as an independent entity, it must secure additional funding and optimize its operations to sustain its growth trajectory. Given its current financial constraints, forming strategic partnerships or seeking acquisition offers might become inevitable.
Uber, on the other hand, has the financial muscle and operational expertise to absorb BluSmart’s business and scale it efficiently. If the acquisition materializes, it could mark a major shift in India’s ride-hailing market, reinforcing Uber’s commitment to electric mobility.
While BluSmart denies any ongoing discussions, industry observers will closely monitor the developments in the coming months. Whether through acquisition or independent growth, BluSmart’s role in shaping India’s EV ride-hailing landscape remains significant.