BluSmart’s operations have come to a standstill following an interim order issued by the Securities and Exchange Board of India (SEBI) on April 15, which uncovered alleged financial misconduct by the promoters of Gensol Engineering—who are also co-founders of BluSmart.
The fallout from the order has led to a suspension of BluSmart’s services, with users in key cities such as Delhi-NCR, Bengaluru, and Mumbai reporting an inability to book rides through the app. BluSmart notified users that bookings were temporarily disabled and assured that if services do not resume within 90 days, wallet balances would be refunded.
In a message to users on the platform X, BluSmart stated:
“We’ve temporarily paused bookings on the BluSmart app. We value your support and aim to return soon. If services do not resume within 90 days, wallet balances will be refunded accordingly.”
Funding Woes and Management Shakeup
BluSmart’s shutdown follows a failed funding round in which the company attempted to raise ₹415 crore (around $50 million). Reports indicate that the crisis at Gensol Engineering significantly undermined investor confidence.
Anmol Singh Jaggi and Puneet Singh Jaggi, co-founders of BluSmart, also held leadership roles at Gensol Engineering, a solar energy firm based in Ahmedabad. SEBI’s order barred both individuals from accessing the securities market and from holding any senior positions at Gensol.
The regulatory body found that the promoters had misused company funds for personal expenses—including a luxury apartment in Gurugram’s DLF Camellias and even a high-end golf set worth ₹26 lakh. SEBI criticized the duo for treating the company’s finances as their personal reserve, highlighting a complete breakdown in corporate governance.
Ride-Hailing Disruption
Following the regulatory crackdown, BluSmart began suspending cab services across multiple cities. Travelers at Delhi Airport, in particular, reported that BluSmart cabs were unavailable. The airport later confirmed the service suspension and advised passengers to use alternative transport options.
In addition to Delhi, users in Gurgaon, Bengaluru, and Mumbai also faced booking disruptions. There had been speculation earlier that BluSmart was considering migrating its fleet to Uber’s platform and potentially exiting the ride-hailing space altogether.
Sources suggest the company had been burning over ₹20 crore each month to sustain operations, and the absence of fresh capital has made it difficult to continue.
Broader Implications for Startups
Industry experts believe this case underscores larger challenges in the startup ecosystem. Tarun Singh, MD of Highbrow Securities, commented that the SEBI action against Gensol highlights the dangers of weak corporate governance in early-stage startups.
“SEBI exposed clear misuse of funds and a culture where the boundaries between personal and business finances were ignored. Incidents like this leave a lasting mark on a company’s credibility and severely dent investor trust,” Singh said.
Gensol, meanwhile, has pledged full cooperation with SEBI’s investigation. The company confirmed it would provide complete access to records and assist in a transparent audit.
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