The company will increase its Indian fleet of electric vehicles — supplied by Tata Motors Ltd., BYD Co., SAIC Motor Corp.’s MG Motor and Stellantis NV’s Citroën — to 13,000 by March from 7,500 currently, Punit Goyal, co-founder of the BP Ventures-backed startup, said in an interview. In three years, it aims to have 25,000 cars, he said.
Part of the funding raised by BluSmart will be used for expanding its operations beyond Delhi and Bengaluru. The company is set to debut in Dubai next month with approximately 100 Audi EVs, with a target to increase the fleet to 300 Audi and Tesla Inc. vehicles by December, as stated by Goyal.
Uber and SoftBank Group Corp.-backed Ola are the dominant players in India’s ride-sharing market. However, both companies have faced challenges in consistently making profits and have received numerous complaints regarding declining service quality. BluSmart is banking on the belief that customers in major cities are ready to pay more for an enhanced experience. The startup claims it can provide this superior service by operating its car fleet on long-term leases, unlike its competitors whose drivers are required to own their vehicles.
“We don’t want to go to small cities because that’s not where the revenue comes from,” said Goyal. “Cheap rides, cheap quality, cheap service and cheap pricing are not our forte.”
The company predicts that it will nearly double its annual revenue to USD 110 million by March 2025. This estimation is based on its current monthly financial performance. Goyal did not specify the timeline for when he anticipates the company to become profitable.
Transitioning to electric power
BluSmart has always kept an all-electric fleet. Its competitors are also introducing more environmentally friendly choices to their customers. Last year, Uber announced plans to incorporate 25,000 electric vehicles into its platform in India, without specifying a timeline. At the same time, Ola started deploying 10,000 electric scooters earlier this year.
Road transport is estimated to be responsible for up to 30% of the air pollution in India's major urban areas. This pollution, as reported by the International Energy Agency, leads to severe long-term health effects and can even result in premature deaths.
Electrification is a key aspect of the nation's commitment to achieve net zero carbon emissions by 2070. However, progress has been hindered by the expensive nature of purchasing an electric vehicle and the lack of sufficient charging stations. The role of ride-hailing services is complex. A ride-hailing trip without carpooling generates approximately 47% more emissions compared to a private car trip. However, traveling in an electric vehicle during a ride-hailing journey can reduce emissions by around 50%, as stated by the US-based nonprofit Union of Concerned Scientists.
BluSmart has secured USD 200 million in equity and long-term growth debt. Currently, the company is raising USD 25 million, which includes investment from its founders, existing investors, family offices, and founders of other startups. The funding round, which is part of BluSmart's three-year USD 300-million plan, is expected to close by late June.
Goyal mentioned that even though the company is planning to expand into Dubai, the primary focus will remain on the Indian market.
“You can fit 15 Singapores in terms of population” in the area around the capital of Delhi, he said. “That’s a huge opportunity and that’s where the key market is.”
Disclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.
