Just a week ago, at Startup Mahakumbh 2025, Union Minister Piyush Goyal delivered some tough love to India’s startup ecosystem. He emphasized accountability, corporate governance, and the need for stronger fundamentals. A week later, two of the most-celebrated startup stories — BluSmart and Byju’s — are in the news, not for innovation or impact, but for deception, diversion of funds, and serious regulatory infractions.
This week has, perhaps more than any other in recent memory, laid bare the rot hiding behind glossy pitch decks and high-decibel PR.
The Jaggi Brothers and the BluSmart Mirage
The SEBI order dated April 15 is nothing short of explosive. It exposes how Anmol and Puneet Singh Jaggi — founders of EPC firm Gensol Engineering and the electric cab startup BluSmart — allegedly turned public money meant for green mobility into a personal treasure trove.
Gensol, the company tasked with purchasing EVs to be leased to BluSmart, secured loans totaling ₹977 crore from government-backed lenders like IREDA and PFC between 2021 and 2024. Out of this, ₹664 crore was allocated for procuring 6,400 electric vehicles.
By February 2025, only 4,704 EVs had been purchased — leaving a ₹262 crore hole in the balance sheet. SEBI’s interim order traces the funds to a labyrinth of shell entities, creative accounting, and lavish personal indulgence. A day after receiving ₹71.39 crore from IREDA, Gensol transferred ₹93.88 crore to GoAuto, its vehicle supplier. Before the day was over, GoAuto had moved ₹50 crore to another company in which the Jaggi brothers were partners. A few days later, that company funneled ₹43 crore to DLF Limited for a luxury apartment in The Camellias, Gurugram’s most elite address.
Fiction Masquerading as Fact
The deception didn’t stop at the money trail.
SEBI found that Gensol misled markets with false declarations. In January, at the Bharat Mobility Global Expo, the company claimed it had received pre-orders for 30,000 units of its newly launched EV. These claims turned out to be vague Memorandums of Understanding (MoUs) — lacking details on price, delivery timelines, or financial commitments.
When NSE officials visited Gensol’s Pune factory, they found barely any activity and a couple of workers lounging around.
BluSmart’s Fall and the Uber Pivot
The ripple effects reached BluSmart — a company once hailed as a clean, eco-friendly alternative to Uber. Today, BluSmart has paused new bookings and reports suggest it may pivot to becoming a fleet partner for Uber itself.
This isn’t just about one company’s downfall — it’s about the collapse of a narrative. A startup built on the promise of sustainability and disruption has turned into a cautionary tale in financial manipulation.
Balanced Perspective: Accountability Does Exist
To be fair, India’s startup ecosystem also boasts examples of companies that uphold strong governance and transparency. Firms like Zerodha and Freshworks have demonstrated the importance of balancing rapid growth with ethical practices, providing a counterpoint to the gloom.
Such companies should serve as a benchmark for aspiring founders — showing that innovation and accountability can coexist.
The Media’s Role: Cheerleaders or Watchdogs?
This crisis isn’t just about BluSmart or Gensol — or even Byju’s. It’s also about the media and the so-called “finfluencers” who hype up startups without adequate scrutiny. The business press has, for years, served as the unofficial PR arm of startup founders — glamorizing them through 30-under-30 lists, hero worship in interviews, and fawning panel discussions.
As regulatory scrutiny deepens, it’s time for media platforms to rethink their role. Should they blindly cheerlead innovation, or act as critical watchdogs ensuring transparency?
BluSmart Lessons for the Startup Ecosystem
India’s growth story cannot thrive on deception, extravagant lifestyles, or loopholes in corporate law. The coming months will serve as a litmus test — not only for regulatory bodies like SEBI but also for the integrity of India’s startup narrative. Last year, the Confederation of Indian Industry (CII) introduced a commendable Startup Governance Charter. Now is the moment to bring it to life, particularly if the world’s third-largest startup economy aspires to truly compete on a global stage. After all, the term “startup” is merely a label; at its core, every startup is a company — and companies must adhere to the same principles of governance and accountability.
Actionable Steps for Startup Stakeholders
- Founders: Integrate ethical governance into daily operations to cultivate long-term trust and credibility.
- Investors: Insist on rigorous audits and full transparency before committing funds to ventures.
- Regulators: Impose penalties that deter misconduct and prevent recurring abuse, rather than relying solely on remedial measures.
- Media: Transition from glorifying founders to critically evaluating startups, ensuring that public narratives are grounded in truth.
As regulatory scrutiny tightens, India’s startup ecosystem faces a pivotal crossroads. This course correction is imperative—not just to restore confidence in the ecosystem, but to ensure the sustainability of innovation and enterprise. One thing remains undeniable: the era of unquestioned idolization of founders must come to an end.
