Car Repair Startup GoMechanic lays off 70% of its workforce
- ByStartupStory | January 18, 2023
GoMechanic, a car repair startup, has announced the layoff of 70% of its workforce as the company struggles to raise funds amid serious accounting concerns.
GoMechanic co-Founder Amit Bhasin said in a LinkedIn post Wednesday that the Sequoia India-backed company made “grave errors in judgment” by pursuing growth at all costs. He said the leadership has decided to “restructure the business while we look for capital solutions”.
The Gurgaon-based startup was founded in 2016 with the goal of bridging the gap between authorized service centers and local workshops. Despite discussions with several investors, the company has recently struggled to raise funds.
The startup was reportedly in talks early last year to raise a round of funding led by Tiger Global at a valuation of more than $1 billion.
“However, the inherent challenges of the sector took the better of us, and we made grave errors in judgment as we pursued growth at all costs, particularly in financial reporting, which we deeply regret,” according to Bhasin.
“We take full responsibility for this current situation and unanimously have decided to restructure the business while we look for capital solutions. This restructuring will be difficult, and we will have to lay off approximately 70% of the workforce,” Bhasin further said.
GoMechanic’s leadership “got carried away” in their pursuit of every opportunity for growth. Seeking the support of “our well-wishers,” he added that GoMechanic is working on a viable plan under the circumstances.
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