A consortium led by Lifelong Group has acquired ailing company GoMechanic months after the Sequoia India-backed startup admitted “serious errors” in its financial reporting.
Lifelong Group, which serves several major auto industry players, including Hero and General Motors, said it won the bid to acquire GoMechanic, whose investors were seeking a sale earlier this year.
“This transaction will help preserve the ecosystem as a whole and will also enable GoMechanic employees to make a living,” Lifelong Group said in a statement.
The move caps an embarrassing episode in the Indian startup community after GoMechanic’s founders were found to have misrepresented facts, inflated revenue figures, kept investors in the dark and tried to raise new funding under false pretenses.
Reputable lenders, including Tiger Global, SoftBank, and Malaysia’s Khazanah, evaluated an investment in GoMechanic last year, but passed for various reasons. An investigation into the startup, which offers car services such as repairs and car washes, concluded that many of its garages were fictitious, businesskinda.com previously reported.
With no new funding in sight, GoMechanic scrambled to cut costs and eliminate 70% of its workforce.
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