GoMechanic GoMechanic to lay off 70 pc staff after founders admit accounting irregularities
Sequoia-backed car repair startup GoMechanic is going to lay off 70 percent staff after founder Amit Bhasin admitted to financial reporting errors, adding that the cash-strapped company will also have its accounts audited by a third party.
"As entrepreneurs, we identify problems, come up with solutions, and explore every opportunity to grow those solutions to meet unmet needs. But in this instance, we got carried away," said Bhasin in a LinkedIn post on January 17.
"Our passion to survive the intrinsic challenges of this sector and manage capital, took the better of us and we made grave errors in judgment as we followed growth at all costs, particularly in regard to financial reporting, which we deeply regret," Bhasin added.
Bhasin also said that the company will seek "capital solutions."
GoMechanic was in talks to raise $75-80 million in a funding round led by SoftBank and Malaysian sovereign fund Khazanah Nasional, but the deal was called off due to accounting irregularities, a Moneycontrol report said citing sources.
GoMechanic will be the fourth Sequoia Capital-backed startup to come under fire for accounting irregularities, the report said.
In 2022, financial services unicorn BharatPe, Singapore-based business-to-business (B2B) e-commerce startup Zilingo, and social commerce startup Trell were accused of accounting irregularities, it said.
The company was founded by Kushal Karwa, Amit Bhasin, Rishabh Karwa, and Nitin Rana in 2016.
GoMechanic runs a network of partner garages or workshops that provide quality car repairing and servicing at much lower rates than automakers' service centres.
It charges a commission from the garages in its network.
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