After admitting “severe mistakes” in financial reporting, Longevity Group purchased GoMechanic.
The New Delhi-based Lifelong Group, which services Hero and General Motors, won the bidding to purchase GoMechanic, whose investors pushed for a sale earlier this year.
“This deal will assist in protecting the ecosystem at large and also permit giving continuing livelihood to the staff at GoMechanic,” said Lifelong Group, now a majority investor in GoMechanic.
When GoMechanic founders lied, exaggerated sales statistics, kept investors in the dark, and tried to acquire more capital under pretenses, the purchase ended a humiliating chapter in the Indian startup ecosystem.
Longevity Group says GoMechanic repaired 30,000 automobiles in January at 800 facilities.
Last year, Tiger Global, SoftBank, and Malaysia’s Khazanah considered investing in GoMechanic but opted against it for various reasons. TechCrunch stated that a review commissioned by GoMechanic’s funders found that many of its garages were fake.
GoMechanic slashed 70% of its staff to save costs without additional investment. The seven-year-old business raised $60 million and sought a $1.2 billion value last year. In recent weeks I reduced the startup’s value to $30 million.
