The founders of GoMechanic admitted to falsifying figures to investors after SoftBank found irregularities in the five-year-old firm's growth and revenue numbers while inspecting accounts before a potential investment. As per the joint statement issued by major investors, the investors of GoMechanic were recently made aware by the company's founders of the serious inaccuracies in the company's financial reporting. We are deeply distressed by the fact that the founders knowingly misstated facts, including but not limited to the inflation of revenue, which the founders have acknowledged. All of this was kept from investors. The investors have jointly appointed a third-party firm to investigate the matter in detail, and we will be working together to determine the next steps. GoMechanic is backed by investors such as Sequoia Capital, Tiger Global Management, Orios Venture Partners, Brand Capital, Chiratae Ventures, and Elina Investments.

The due diligence done by EY showed evidence of round-tripping in financial parlance. This means the company inflated revenue figures and showed disproportionate revenues from a clutch of garages that possibly didn't exist. The company did not follow a franchisee-led model, nor did it charge franchisee fees from workshops. Instead, it operates on a revenue share model, so the amount of business they do per month is recorded on its workshop management system.

Click the icon for more information-