BluSmart Mobility is one of the start-ups that aim to provide eco-friendly and sustainable transportation solutions. How? You may ask. By offering electric vehicles that produce zero emissions. If you reside in Delhi NCR or Bengaluru, you must have definitely seen BluSmart cabs on the crucial roads. Launched in 2019 by Anmol Singh Jaggi, Puneet Singh Jaggi, and Punit K Goyal, BluSmart Mobility became one of the popular pre-scheduled cabs. BluSmart revenue & financials caught folks’ eyes. Reason? Due to tremendous losses! Do you know despite earning Rs.29 crore, its losses touched Rs.69 crore in FY22?
Stick to this write-up to know the reasons behind it!
BluSmart Revenue Breakdown
Gurugram-based firm’s revenue jumped to Rs.29 crore in FY22. It made money mainly from two sources. Look at the table below-
|Revenue Sources||Amount Earned in FY22||Amount Earned in FY21|
|Cabs||Rs.29 crore||Rs.9 crore|
BluSmart didn’t disclose revenue break-ups across those two verticals. That’s why we have mentioned the wholesome amount of revenue earned by the firm. But this is a massive jump! Its scale rose 222% because, in FY21, it earned only Rs.9 crore. This is a remarkable achievement for a four-year-old startup. Do you know why it got so famous? Because of its eco-friendly services i.e. e-cabs and charging facilities. It is an important player in the EV (Electric Vehicle) revolution in India.
In the above sections, you have seen the bright side of this eco-friendly startup. It is true that the revenue jump was highly appreciable. But it has a dark side too! What’s that? You may ask. Its expenses. By now you have realized that the major factor responsible for a firm’s losses is its expenses. BluSmart lacks a diverse set of revenue sources but it has numerous expenses. Do you know how much its expenses cost in FY22? It’s Rs.97.8 crore. Almost triple the amount of revenue it earned! Where did the firm burn such a whopping amount? In its following expenses-
|Driver Related Cost||Rs.23.8 crore|
|Lease Rent Expenses||Rs.19.9 crore|
|Employee Benefit Expenses||Rs.10.1 crore|
|Legal Professional Fees||Rs.11.1 crore|
|Cab Charging Expenses||Rs.4.6 crore|
Apart from the expenses mentioned above, BluSmart had to spend on other expenses too! Last year (FY21), its total expenditure cost was Rs.48.7 crore. But in FY22, its expenses jumped 100.8% to Rs.97.8 crore. Thus, you can say that the company earned a unit of its revenue by spending Rs.3.37 in FY22.
Are the losses a point of concern?
Now the most obvious query among folks is the concern over BluSmart’s profitability and growth. However, the company doesn’t see it as a point of concern. Because it raised over $109 in its funding round. Also, it received an EV asset leasing loan of $150 million or Rs.1200 crore. It is backed by the Development Financial Institution.
Competition with Ola and Uber
Folks believe that BluSmart is outsmarting other cab services like Ola and Uber in the segment of pre-scheduled cab services. You must have seen the battle of Ola vs. Uber. But BluSmart is not a traditional on-demand cab. You need to book it beforehand. However, the e-cab firm doesn’t see Ola and Uber as its competitors. Wait… What? How’s that possible when they work in the same segment i.e. cab services? Well, you need to consider some facts about BluSmart services viz-
- BlueSmart focuses only on a few high-value routes
- It has a limited fleet size of EVs
- It primarily operates on the high-quality charging network of the city.
So, if it had to compete with larger cab players like Ola or Uber, it would have expanded in tier 2 and tier 3 cities too! But it didn’t. Why? Because it sees other commercial operators as customers for its EV charging network. You must have read above that the charging facilities are a crucial part of BluSmart revenue. And the government is also pushing cab firms to opt for electric vehicles. If Ola or Uber use EVs then they may utilize the charging facilities of BluSmart. Thus, instead of being competitors, they will be its customers.
Financials of BluSmart
The financials of the company BluSmart is summarized in the following table-
|BluSmart’s Financials||Amount (in crores)|
|Market Valuation||Rs.2,050 crore ($250 million)|
|Revenue Earned||Rs.29 crore|
|Profit/Loss||Loss of Rs.65.4 crore|
Although it earned an appreciable amount of revenue from its numerous revenue sources. But the cash outflow in various expenses crossed the threshold. This means the amount spent on expenditures exceeded the amount of revenue earned. Eventually, it continues to face a significant amount of loss.
Future Plans of BluSmart
Ever since 2019, BluSmart claims to have completed over 5 million rides. Also, it is preparing to extend its EV fleets and charging stations to five more cities. It claims to turn into a profitable company by the end of CY 2023. Isn’t the firm too ambitious? Well, it may look like that if you compare its expansion plans with its current losses. But it is confident due to its consistent support from venture capitalists and increased demands for sustainable mobility actions.