GoMechanic, car workshop and auto spare parts platform, has decided to lay off about 70 per cent of its employees. The Sequoia India-backed company’s co-founder Amit Bhasin has said the firm made “grave errors in judgement” as it followed growth at all costs, including in regard to “financial reporting”.
In a LinkedIn post on Tuesday (January 17), the GoMechanic co-founder said, “We take full responsibility for this current situation and unanimously have decided to restructure the business while we look for capital solutions. This restructuring is going to be painful and we will unfortunately need to let go of approx. 70 percent of the workforce. In addition, a third party firm will be conducting an audit of the business.”
GoMechanic was founded in 2016 “to bridge the gap between process-oriented authorised service centers and cost-effective local workshops for people who were looking for a better car repair experience”.
The GoMechanic layoff comes after the company recently struggled to raise funds despite discussions with several investors. Early last year, it was reportedly in talks to raise funding led by Tiger Global at over $1 billion valuation.
Here Is Amit Bhasin’s Full Message:
We founded GoMechanic in 2016 to bridge the gap between process-oriented authorized service centers and cost-effective local workshops for people who were looking for a better car repair experience. In a short span of time, we were able to create a startup that provided a ‘network of technology-enabled car service centers, offering its services at the convenience of just a tap.’ It was our conscious commitment to facilitate a convenient, affordable, and reliable experience that helped us win the trust and hearts of our customers. We were fortunate to get support from a large number of investors in this journey. We came a long way, from starting out with a few hundred customers to expanding our business exponentially to serving more than 7 Lac customers thus far
As entrepreneurs, we identify problems, come up with solutions, and explore every opportunity to grow those solutions to meet unmet needs. But in this instance, we got carried away. Our passion to survive the intrinsic challenges of this sector, and manage capital, took the better of us and we made errors in judgment as we followed growth at all costs, including in regard to financial reporting, which we deeply regret.
We take full responsibility for this current situation and unanimously have decided to restructure the business while we look for capital solutions. This restructuring is going to be painful and we will unfortunately need to let go of approx. 70 percent of the workforce. In addition, a third party firm will be conducting an audit of the business.
While the situation is far from anything we could have ever imagined for Go Mechanic, we are working on a plan which would be most viable under the circumstances.
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