Sequoia-backed car repair start-up GoMechanic acquired by Lifelong Group-led consortium

A consortium led by auto components maker Lifelong Group has acquired distressed car repair start-up GoMechanic. After it reporting financial errors, the board and shareholders of the Sequoia-backed start-up, with support from investor Stride Ventures, initiated a speedy sale to ensure GoMechanic's
continuity of business. 

While the details of the financial transaction remain unknown, it is believed that GoMechanic would've gone for a fire sale. It was last valued at $30 million (in March 2023), down from a peak valuation of $285 million in June 2021.

“Acquisition of the GoMechanic business, aligns with our strategic vision of synergising the Lifelong Group’s proven expertise in the automotive industry. We are focused on building upon GoMechanic's business," Lifelong Group said in a statement. 

Lifelong Group, which services the likes of General Motors, Hero, among others, has been looking to expand its operations in the automotive after-sales segment, where GoMechanic had built a presence. It led the Servizzy consortium, which emerged as the strongest bidder for GoMechanic. 

Business Today reported earlier GoMechanic was in the process of getting acquired and the “deal can close in the next two weeks.” The company had also held preliminary buyout discussions with the likes of CarTrade, Spinny and Cars24, per reports. 

However, those talks are said to have not materialised over “discrepancies” in valuation and other financial metrics. 

It is important to note that GoMechanic is also backed by Tiger Global, Chiratae Ventures, and Snapdeal founders Rohit Bansal and Kunal Bahl among its investors. It has raised a total of $62 million across seven funding rounds, per Tracxn.

In FY22, GoMechanic reported losses of Rs 114 crore on operating revenues of Rs 90.5 crore, per RoC filings. Things went further south for the start-up once stories of its financial misreporting and fictitious garages surfaced. 

GoMechanic’s Co-founder Amit Bhasin admitted to “errors in judgment” in a LinkedIn post in January and also announced the layoff of 70 per cent employees from the firm.  
 

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