The Rise of India’s $200M-funded EV Ride-Hailing Startup - with Punit Goyal, Co-Founder & CEO of BluSmart
On building India's leading EV ride-hailing and charging network, the benefits of asymmetric vertical integration, and tips for entrepreneurs in India.
Welcome to Down to Zero where we (Florian & Shaneez) speak with climate tech leaders about how to build a successful climate-tech company. Follow along to learn their playbooks and how you can apply them to further your career in climate-tech.
Thank you also to Aktsa Efendy for his help on this piece.
The future of mobility in India's megacities is electric. BluSmart, India’s Uber-rival, is one of India's leading integrated electric ride-hailing and charging network operator. With over 7,000 EVs, 4,700 charging points, and 13.3 million zero-emission trips, BluSmart is revolutionizing transportation in a nation of 1.4 billion. To achieve that, BluSmart has raised over $200 million in venture capital across equity and venture debt to date.
We sat down with Punit Goyal, co-founder and CEO of BluSmart, to dive into his entrepreneurial journey from building solar power plants to decarbonizing mobility at scale.
Read on for highlights from our conversation covering BluSmart’s origin, the advantages of their unique vertically integrated approach, and lessons for building in climate-tech in India.
Punit’s journey into electric mobility
What inspired Punit’s transition from solar power to electric mobility?
Punit has been a clean energy entrepreneur through and through. In his early ventures, he built utility-scale solar power plants in India, achieving over €100M in export revenues. But the market crashed in 2012 amidst global bankruptcies.
He built two more solar companies that succeeded, in part thanks to better timing and stronger policy support in India.
Around 2015-16, he started researching electric vehicles. He visited the US and spoke with senior tech executives who all believed that it would be extremely challenging to build an Uber or Airbnb of electric mobility because of challenges with charging infrastructure.
But given his and his co-founder’s unique energy and infrastructure backgrounds, they saw a big opportunity to build an integrated energy infrastructure, mobility, and technology company using renewable energy. That founding thesis led to BluSmart in 2018.
BluSmart's vertically integrated business model
What is BluSmart's business model?
BluSmart is effectively building two integrated businesses:
An all-electric ride-hailing service with a fleet of owned/leased EVs.
A large-scale charging infrastructure network, powered by renewable energy.
Each part reinforces the other. More charging infrastructure enables more EVs, driving higher utilization of the charging network. This vertically integrated approach is difficult to execute and their moat against competitors with siloed business models. And they’re executing against this vision in three steps.
STEP 1 - Create differentiated supply:
BluSmart decouples drivers from asset ownership and chooses to lease vehicles itself. There are about 700 cars per 1,000 people in the US, but that number is much lower in India. So, drivers are not the right people to bring cars onto the platform.
They’ve leased 7,000 vehicles to date which helps them scale much faster than if they relied on drivers to finance vehicles. And compared to purchasing EVs, leasing frees up balance sheets, keeps costs down, and allows BluSmart to focus on what they’re good at.
STEP 2 - Build charging infrastructure:
BluSmart has built 40 charging hubs with 4,700 chargers across 1.6 million sq ft in prime real estate locations. It’s a big investment, and they need utilization to remain high. It’s a chicken and egg problem.
And that’s where the BluSmart fleet comes in: The BluSmart fleet acts as anchor tenant to the charging infrastructure business (similar to Singapore Airlines for Changi Airport) and the charging infrastructure business becomes a bedrock on which the ride hailing business is built.
BluSmart’s charging infrastructure business is profitable from day one because of the internal demand that they're creating. When they open it to third parties, incremental demand that comes in is additional money in the bank. And this is why they really believe in their integrated model instead of just focusing on the ride-hailing business.
STEP 3 - Power with renewables:
Now that BluSmart is at decent scale, they contracted 30 MW of solar power and aim to power their entire charging network with clean energy. It helps them further lower their input cost and decarbonize mobility.
How has BluSmart’s business model evolved?
On the ride-hailing side, BluSmart changed their business model from partnering with Uber to establishing an independent ride-hailing platform.
They deployed their first 300 cars on the Uber platform in 2019. They wanted customers to have a safe, reliable, convenient ride healing experience. But BluSmart realized that no matter how good their cars were and how much people loved their own service, customers were unhappy with Uber itself in India. A lot of non-BluSmart drivers cancelled trips, there was massive surge pricing...
So, they vertically integrated and built their own ride-hailing platform. That gave them greater control over the entire service experience and completely changed their momentum.
Advice on building climate infrastructure and startups
What are some opportunities that Punit would encourage Indian entrepreneurs to look into?
Financing EV infrastructure: Established global financial platforms like Macquarie are setting up shop in India to finance EV leasing and EV charging infrastructure. But this can also be a great opportunity for new players.
Battery recycling: BluSmart has hundreds of megawatts of batteries under management. There is a big need to build large battery recycling and manufacturing plants in India.
Long-range EV manufacturing: There is a huge opportunity for existing automotive giants and new ones to build EVs with longer range that accelerate EV adoption in India.
What are Punit’s top learnings for entrepreneurs building clean infrastructure projects?
Patience and persistence are paramount. These are long-term plays that require patient capital. Things take time, but if you stay the course the results will come.
Be willing to tackle the hard problems. Transforming mobility and the building infrastructure is complex, but absolutely critical for decarbonization. We need more entrepreneurs building the solutions that will create a cleaner, more sustainable world.