GoMechanic, an auto-repair and carwash services provider, has laid off 70% of its workforce as the startup grapples with funding crunch. The Gurgaon-headquartered startup had been trying to raise a round of funding led by Tiger Global at over $1 billion valuation, however, the talks did not materialize into a deal after some discrepancy was found during the due diligence process. EY was appointed as part of the due diligence for the recent funding deliberations and found scores of issues including inflated revenue and that some garages were fictitious. Chiratae Ventures, another investor in GoMechanic, was looking to sell some of its shares a few months ago at a valuation of $700 million. GoMechanic co-founder Amit Bhasin acknowledged the “grave errors in judgement” including the inflation of revenue, which was kept from the investors. The remaining staff has been asked to work without pay for three months.
Today: November 30, 2023