Desi online automobile repair platform GoMechanic has laid off 70 per cent of its workforce. The Sequoia India-backed startup has been struggling to raise funds amid serious concerns of accounting troubles. In a LinkedIn post, cofounder Amit Bhasin has admitted to grave errors in the company’s financial reporting. The company has also reportedly asked the remaining staff to work without pay for three months.
“Our passion to survive the intrinsic challenges of this sector, and manage capital, took the better of us and we made errors in judgment as we followed growth at all costs, including in regard to financial reporting, which we deeply regret,” Bhasin wrote in his post. “We take full responsibility for this current situation and unanimously have decided to restructure the business while we look for capital solutions,” he added in the post.
Talking about revival plan, Bhasin wrote, “While the situation is far from anything we could have ever imagined for GoMechanic, we are working on a plan which would be most viable under the circumstances.” “We will be working together to determine the next steps for the company,” it added.
Last year, SoftBank pulled out of investing in GoMechanic after a due diligence by EY India highlighted loopholes in the company’s accounts. Ever since then, the company has been struggling to raise funds, despite advanced-stage discussions with several investors.
GoMechanic was in talks to raise a round of funding via American investment firm Tiger Global at a valuation of over $1 billion early last year when the financial discrepancy was discovered.
GoMechanic was founded in 2016 by Amit Bhasin, Kushal Karwa, Nitin Rana, and Rishabh Karwa. The startup is backed by investors including Sequoia Capital, Tiger Global, Orios Venture Partners and Chiratae Ventures.
“Our passion to survive the intrinsic challenges of this sector, and manage capital, took the better of us and we made errors in judgment as we followed growth at all costs, including in regard to financial reporting, which we deeply regret,” Bhasin wrote in his post. “We take full responsibility for this current situation and unanimously have decided to restructure the business while we look for capital solutions,” he added in the post.
Talking about revival plan, Bhasin wrote, “While the situation is far from anything we could have ever imagined for GoMechanic, we are working on a plan which would be most viable under the circumstances.” “We will be working together to determine the next steps for the company,” it added.
Last year, SoftBank pulled out of investing in GoMechanic after a due diligence by EY India highlighted loopholes in the company’s accounts. Ever since then, the company has been struggling to raise funds, despite advanced-stage discussions with several investors.
GoMechanic was in talks to raise a round of funding via American investment firm Tiger Global at a valuation of over $1 billion early last year when the financial discrepancy was discovered.
GoMechanic was founded in 2016 by Amit Bhasin, Kushal Karwa, Nitin Rana, and Rishabh Karwa. The startup is backed by investors including Sequoia Capital, Tiger Global, Orios Venture Partners and Chiratae Ventures.
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