by NEW DELHI : Venture capital agency Orios Venture Partners, which owns about 17.1% of troubled automotive servicing startup GoMechanic, in an inside mail to its restricted companions (LP) stated it has written down its investment within the startup, a replica of which has been reviewed by Mint.
“While our publicity from Fund II was 7.79% of the dedicated corpus, eventually spherical’s valuation, the property represented round 1.27x of the fund’s a number of on invested capital (MOIC). We are writing down this worth,” acknowledged the mail. Orios Venture Partners had raised a complete dedication of $75 million in the direction of its second fund, its previous filings present.
GoMechanic was final valued at $285 million after elevating $42 million, in line with VCCedge information. The Gurugram-based agency was trying to elevate a brand new funding spherical led by SoftBank and Khazanah Nasional and was commanding a valuation of over $800 million.
Orios in its letter stated that GoMechanic had been inflating gross sales and underreporting prices with the purpose of securing a better valuation for his or her firm. “It is stunning to us that 2 boys who got here from humble households and studied at IIM Ahmedabad would resort to such measures when their enterprise was already price 100s of thousands and thousands of {dollars},” the mail stated.
The mail additionally makes a notice that different buyers in GoMechanic have commissioned a forensic audit to analyze allegations of monetary fraud and misreporting.
“Surprisingly, KPMG and PWC, previous auditors of the corporate, didn’t disclose any points of their stories both,” the mail notes.
Emailed queries to spokespersons of GoMechanic, Orios Venture Partners, KPMG and PwC didn’t elicit any response.
Tracxn information exhibits Sequoia Capital owns the most important stake in GoMechanic at 26.89%, adopted by Orios Venture Partners at 17.1%, Tiger Global at 10.03%, and different buyers with a mixed 11.2% stake. The firm’s founders, Amit Bhasin, Kushal Karwa, Nitin Rana and Rishabh Karwa, collectively personal 25.5% of the corporate.
GoMechanic on Wednesday, in a Linkedin publish by co-founder Amit Bhasin admitted to falsifying figures to buyers after SoftBank discovered irregularities within the five-year-old agency’s progress and income numbers whereas inspecting accounts earlier than a possible investment.
The agency additionally introduced the dismissal of 70% of its workers, numbering between 1,100 and 1,200.
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