A consortium led by Lifelong Group acquired the distressed Indian car servicing platform GoMechanic for an undisclosed sum.
GoMechanic's valuation plunged from $285M in June 2021 to $30M in March 2023 after an EY report uncovered financial irregularities earlier this year.
After the report discovered that the founders had inflated revenue figures, violated accounting norms, and diverted funds, prospective investors SoftBank and Khazanah pulled out of a new fundraising round.
- Shortly after, GoMechanic laid off 70% of its workforce as it struggled to reduce its burn rate.
- The firm had raised $62M from VCs, many of which have written off the majority of their stakes.
- The three largest investors, Sequoia Capital, Orios Venture Partners, and Tiger Global, own a 26.89%, 17.1%, and 10.3% stake in the firm, respectively.
- Venture debt provider Stride Ventures will get back its ~$12M (1B rupees) debt financing within a few months' time.
Indian automotive organizations Hero and General Motors were also in contention to acquire GoMechanic.
