According to reports, GoMechanic layoffs have come as a shock to many of its employees, who say that they were not given any warning about the potential cuts. The layoffs are estimated to have impacted around 70% of the workforce, with some reports stating that as many as 200 employees may have been let go. While the reasons for the layoffs are still unknown, it is likely that investor pressure hastened their implementation. With several rounds of funding falling through in recent months and its costly ramp-up efforts coming to a close, GoMechanic appears to be facing a funding crunch which could lead to further job losses.
The move comes as the Gurgaon-headquartered GoMechanic, which offers auto-services such as repairing and carwashing, is struggling to raise funds for over a year. However, officials say that the company’s new investors will help it scale rapidly and offer its services to a wider audience.
Given GoMechanic’s talks with Tiger Global last year and the massive valuation that was rumored, it is no surprise that the company did not come to a deal. GoMechanic seems like a powerful company with a lot of potential, but there may be some discrepancy during due diligence which could prevent them from raising at their rumored valuation.
Interestingly, GoMechanic opted not to take SoftBank’s lead in the round and instead invested with Malaysia’s Khazanah. This decision likely came down to Khazanah’s stronger experience in e-commerce and its investment history in other tech startups. Meanwhile, SoftBank opted for a smaller role in the round and is now estimated to have put between $50 million and $70 million into the company.
The collegiate cheating scandal that has rocked sports across the United States for months is apparently not as cut and dry as people thought. Two sources have told the press that there are significant discrepancies within the books of this new round of tests, which calls into question its validity. Despite these discrepancies, however, officials from the testing company responsible for conducting these tests insist that they are still valid.
Despite EY’s purported findings, the startup was ultimately approved for the funding round with conditions including increased transparency and an outside audit to ensure that all revenue is legitimate. However, the scrutiny may have been a costly distraction for the young company just as it was achieving significant milestones.
Sequoia India, the influential venture investor in the South Asian market, is facing financial difficulties with its most recent investment, a startup which is fast running out of cash. With Zilingo, BharatPe and Trell having governance and auditing issues in the past one year, the saga of Sequoia’s disastrous investment could spell trouble not just for this latest company but also for other startups backed by Sequoia India.
At a valuation of $700 million, Chiratae Ventures was one of the larger investors in GoMechanic. As with other large investors, it may have been interested in selling some of its shares at that price point. However, the sale never occurred and the company’s stock has since declined significantly, likely due to its shaky financials.
The GoMechanic cap table shows that the company possesses a total market value of $396 million. First traded on the OTCQX marketplace in May of this year, GoMechanic’s
The founders of GoMechanic have admitted to falsifying their company’s financial reports, leading investors to withdraw their support. The startup has now filed for bankruptcy, putting its employees out of work and leaving many customers stranded.
The founders of the company have been found to have knowingly lied about their business’ performance, which has caused significant damages to the investors. It has now been announced that a third party firm will be investigating the matter in more detail. Depending on what is found, steps may need to be taken for the company as a whole.
After posting their impressive growth numbers on LinkedIn, GoMechanic quickly realized that they had made some grave errors in judgement as they followed growth at all costs, particularly in regard to financial reporting. The company is working hard to make things right and ensure that their past mistakes don’t repeat themselves.
The Go Mechanic staff was greatly surprised by the news of their restructuring. While they understand that it is going to be painful, they remain committed to finding a solution which will be most beneficial for the company. The third party firm conducting an audit is a precautionary measure in case any illegal or unethical behavior was involved in the company’s operations. The team knows that this isn’t an easy time, but they are hopeful that things will turn out okay in the end.
The billion-dollar startup has been struggling financially and is now taking drastic measures to save money. The remaining employees are being asked to work without pay for three months in order to help the company get back on its feet.
Eyal Waldman, GoMechanic’s co-founder and CEO, believes that the company’s core product will be a hit with consumers. “GoMechanic is designed to help busy people easily find and book garage service and repair appointments,” he said. “We’re excited to provide our customers with a convenient way to get the work they need done quickly and affordably.”