Weeks after admitting to inflating its numbers, GoMechanic claims to have achieved 70 percent of its peak volumes in January and said that about 90 percent of its workshops remain active, even as the company is learned to be on the block for a fire sale.
The Sequoia-backed car services platform claimed that it serviced 30,000 vehicles, which was almost 70 percent of the volumes it achieved in July 2022, with the Delhi-National Capital Region contributing the most. GoMechanic also said more than 800 workshops were active as of January.
The company, however, had approached car-selling marketplaces Cars24 and Spinny among others for a potential sale, after their founders admitted to financial reporting errors and fired 70 percent of their staff.
"What is really heartening about these numbers is that these have been achieved despite us slashing the marketing costs substantially in January. We’re continuing to invest substantially in the upskilling of auto service professionals through the NSDC (National Skill Development Corporation) partnership," said a spokesperson for GoMechanic
"The real goal we are focused on is achieving operational break-even and profitability at an aggregate, annual P&L level as soon as possible. The January numbers give us the required confidence," the spokesperson added.
In the second week of January, one of GoMechanic's four founders Amit Bhasin admitted to financial reporting errors at the Sequoia-backed car repair startup and stated that the cash-strapped company will lay off roughly 70 percent of its workforce while also having its accounts audited by a third party.
Bhasin also said that the company will seek "capital solutions." GoMechanic was in talks to raise $75-80 million in a funding round led by SoftBank and Malaysian sovereign fund Khazanah Nasional, but the deal was called off due to accounting irregularities, according to people with knowledge of the matter.
SoftBank was in talks to invest about $35 million in the company through its vision fund, with participation from Khazanah and several others, Moneycontrol reported.
Founded in 2016 by Kushal Karwa, Amit Bhasin, Rishabh Karwa, and Nitin Rana, GoMechanic operates a network of partner garages or workshops that provide quality car repairing and servicing at much lower rates than automakers' service centres. GoMechanic charges a commission from these garages.
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