‘Allegations against BluSmart are serious, but…’: Sabeer Bhatia joins debate on Gensol crisis after Aman Gupta
A day after BluSmart suspended operations and its affiliate Gensol Engineering Ltd was flagged by SEBI for alleged fund diversion and document falsification, Hotmail co-founder Sabeer Bhatia weighed in on the controversy, cautioning against premature judgment.
Bhatia acknowledged the seriousness of the allegations facing the electric mobility startup but warned that trial by media could damage more than just the company in question.
“Allegations against BluSmart are serious—but trial by media, before facts are clear, hurts the whole startup ecosystem. Vilifying all founders over one case breeds fear, not innovation. Media must be prudent, not sensational,” Bhatia posted on X.
He stressed the importance of due process and urged restraint in coverage, noting that broad-stroke criticism risks stifling the risk-taking spirit that fuels innovation.
BluSmart’s shutdown on Wednesday followed SEBI’s move to bar Gensol Engineering Ltd executives from the market, citing misrepresentation of financials and misuse of IPO proceeds. The unfolding controversy has sparked debate within India’s startup community, with concerns mounting over reputational fallout.
Aman Gupta, a prominent entrepreneur and investor on Shark Tank India, recently took to social media to express his views on the downfall of BluSmart, a significant event in the startup ecosystem. Gupta described the situation as a “much-needed reality check” for the sector. He conveyed his empathy for all parties involved, noting that “investors lost money,” “founders lost years of hard work,” “employees lost stability,” and “customers lost a service they genuinely loved.” These reflections underscore the widespread impact of the collapse on various stakeholders.
Gupta highlighted the broader implications of the incident, pointing out its potential to erode trust within the startup community. “What’s even more concerning,” he added, “is that this incident has dented trust in the ecosystem. You’ll now hear: ‘Yaad hai BluSmart ke saath kya hua tha?’” This perspective suggests that such events could have a lasting negative effect on investor confidence and entrepreneurial enthusiasm, both essential for a vibrant startup environment.
Despite the setback, Gupta maintained an optimistic outlook, emphasizing the resilience of the Indian startup ecosystem. “What matters is how we as a country and ecosystem bounce back,” he said. “The Indian startup ecosystem is resilient. We always rise stronger. And we will this time too.” His comments reflect a belief in the sector’s capacity to recover and adapt, drawing on the broader historical context of challenges faced by multinational companies globally.
In a more light-hearted take, Prabhkiran Singh, CEO of Bewakoof, commented on BluSmart’s issues, reflecting on how they ironically indicate India’s economic growth. He noted that while “scamsters” previously used misappropriated funds to purchase homes abroad, the trend has shifted to high-end investments within India, such as in DLF Camellias, Gurgaon.
The BluSmart app, which oversees a fleet of over 8,000 electric taxis in three cities, halted bookings on Wednesday evening and remained inactive the following day. This abrupt suspension has left numerous drivers without work and has led frustrated customers to voice their concerns on various social media platforms.
The suspension comes in the wake of recent regulatory measures involving the Jaggi brothers, who are co-founders of Gensol, an affiliate of BluSmart. The Securities and Exchange Board of India (SEBI) recently prohibited the brothers from participating in the stock market and initiated a forensic investigation into their renewable energy company. This investigation is focusing on allegations that funds intended for electric vehicle procurement were misappropriated to purchase luxury apartments.
