GoMechanic 2.0: New Founders secure $6 mn funding from marquee investor

Beleaguered car servicing startup GoMechanic has secured $6 million in capital. The funding comes several months after GoMechanic founders admitted to financial irregularities and investors began an insolvency process. In March this year, the firm was acquired by Servizzy, a subsidiary of the Delhi-based Lifelong Group in a slump sale.

The company declined to reveal the name of the investor but said it raised the funding from a marquee investor, which is a notable leader in the investment industry. It said this investor led the funding round along with the existing shareholders.

“This achievement serves as a profound vote of confidence towards the company and in the potential of its business model from the investment community, the existing shareholders, Stride Ventures and Lifelong Group, and the startup community,” said Himanshu Arora, the new co-founder and chief executive officer of GoMechanic. “This exemplifies the company's unwavering and holistic growth and progress. We're committed to building a brand that a consumer can trust for their car repairs and services.”

After the acquisition, the company’s sole purpose is to create transparency and be more cost-effective and efficient. Under the leadership of Muskan Kakkar, chief operating officer and the new co-founder of GoMechanic, the company has expanded its business lines. This includes 'GoMechanic Service Business', 'GoMechanic Spares,' and 'GoMechanic Accessories’. The firm said it has experienced strong growth, with a fourfold increase in revenue. This refined approach to business practices is positively influencing the company's performance, with projections indicating that ‘GoMechanic Spares’ and ‘GoMechanic Accessories’ will double their revenues by the end of this fiscal year, underscoring the robust potential within these specific areas.

GoMechanic Service now handles an influx of 800 cars per day. Furthermore, GoMechanic has ventured into the luxury and premium services market with 'GoMechanic LUXE,' a meticulously curated network of state-of-the-art luxury car service centres established across India. These centres specialize in servicing renowned brands such as Audi, BMW, Mercedes, and Porsche and currently manage over 600 luxury cars per month. The company is continuously working to provide top-notch services that not only meet but exceed customer expectations.

“GoMechanic is revolutionizing the luxury car services industry by setting an unprecedented standard for personalized, high-quality, and convenient services,” said Kakkar.

Notably, the MILES membership programme has seen profitable growth. Membership sales per month have increased by 72 per cent in October 2023 compared to April 2023. This augmentation indicates a positive outcome where customers are now more actively involved and loyal to the brand or service.

The company said it is steadfast in its commitment to fostering strong customer loyalty and building an extensive and devoted customer network.

GoMechanic Accessories is now offering products such as vacuum cleaners and Android car screens, as well as tyre inflators. These products are now available on popular e-commerce platforms like Amazon and Flipkart, making GoMechanic's offerings more accessible to customers.

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Gurugram-based GoMechanic was once India’s largest aftermarket automotive service and maintenance platform and was backed by investors such as Sequoia (rebranded as Peak XV Partners) and Tiger Global. In January this year, investors of GoMechanic flagged accounting irregularities at the company. It then decided to lay off 70 per cent of its workforce as it struggled to raise fresh funds. At that time, it became one of the third Sequoia-backed startups in over a year, after Singapore-based Zilingo and fintech unicorn BharatPe, to report financial irregularities.

Financial irregularities at the company came to the fore at a time when SoftBank, Malaysia’s sovereign wealth fund Khazanah Nasional Berhad, and Norwest Venture Partners were in talks to lead a $75-million funding in GoMechanic, according to sources. SoftBank was in talks to invest about $30 million in GoMechanic. The company was expecting to raise funding at a $1-billion valuation.
 

A brainchild of four friends -- Kushal Karwa, Amit Bhasin, Rishabh Karwa and Nitin Rana -- the original GoMechanic firm was founded in 2016.