GoMechanic A Troubled Startup Valued at over $30 million, Finds a Buyer in CarTrade



Amit Bhasin, a cofounder of Sequoia-funded GoMechanic, made a public admission of financial misreporting almost two months ago, and the firm for after-sales services is said to have found a buyer in the car marketplace CarTrade.

According to a story by The Morning Context, CarTrade has valued GoMechanic at well over $30 million. When GoMechanic raised $42 Mn in a fundraising round led by Tiger Global in June 2021, it reached a post-money valuation of $285 Mn. This represents a significant fall from that price.

The newspaper cited a person who claimed that in addition to CarTrade, another investment business was also involved in the transaction. Bhasin claimed that the startup identified a buyer willing to pay INR 200 Cr during discussions with prospective purchasers. The startup was seeking to sell itself for INR 250 Cr. The business then began searching for a different buyer who could acquire the remaining INR 50 Cr.

According to the article, Bhasin and another cofounder, Kushal Karwa, would sell their shares. The percentage of the business that CarTrade and the co-investor will own, however, could not be determined.

The troubled startup began exploring a sale after Bhasin admitted to committing ‘errors in judgment’ in regard to financial reporting while trying to pursue growth. It reportedly held talks with multiple companies, including Cars24 and Spinny, for a takeover.

GoMechanic, which was established in 2016 by Amit Bhasin, Kushal Karwa, Nitin Rana, and Rishabh Karwa, connects automobile owners with local mechanics. Also, it offers genuine accessories and spare parts for cars on its website.

As GoMechanic reportedly let off over 70% of its workers in January, Bhasin posted on LinkedIn the next day.

Orios Venture Partners, the second-largest institutional shareholder in GoMechanic, wrote down its investment in the upstart auto repair shop after the public acknowledgment of wrongdoing. Sequoia, another investor in the business, also began a forensic investigation.

CarTrade, which assists consumers in the purchase and selling of new and used vehicles, will be able to enter the after-sales service market thanks to the acquisition of GoMechanic.

An initiative to scale investments and acquisitions in the Indian automobile business was launched last month by the multi-channel auto marketplace, which is traded on stock exchanges. It declared that it would invest INR 750 Cr over the following five to seven years to improve its position in the auto-tech sector.

In the quarter that concluded in December 2022, CarTrade reported a combined profit after taxes of INR 14.04 Cr while its total revenue was INR 115.85 Cr.

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