BENGALURU: Online car service and repair start-up GoMechanic to fire 70% of its workforce and it plans to restructure the business. Amit Bhasin, co-founder, GoMechanic, in a LinkedIn post, admitted that the start-up made errors in financial reporting too.
"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. 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," he said.
Founded in 2016 by four friends - Kushal Karwa, Amit Bhasin, Rishabh Karwa and Nitin Rana, GoMechanic is a network of technology-enabled car service centres.
According to Tracxn, the company has so far raised $62 million in funding, and its latest funding round was in June 2021. As on July 31, 2022, the start-up had employed 1,230 people.
Backed by Sequoia Capital, Chiratae Ventures, Tiger Global Management and Brand Capital, among others, in FY22, the start-up reported Rs 96.8 crore in revenues and loss for the year stood at Rs 114.3 crore, up from Rs 27.4 crore in the previous fiscal.
Bhasin added that they take full responsibility for the current situation and have decided to restructure the business while they also look for capital solutions. "This restructuring is going to be painful and we will unfortunately need to let go of approximately 70% of the workforce," he said.
A third-party firm will be conducting an audit of the business. The start-up has so far served over 7 lakh customers.