The financial details of the acquisition are still fuzzy. But sources in the know said this deal will provide some respite to debt venture firm Stride Ventures which has over Rs 100 crore invested in the start-up.
According to sources, there is no clarity on what happens to the founders.
An email sent to the founders of GoMechanic, Lifelong Group did not elicit any response until the time of going to press. Attempts made to connect with investors were not successful either.
Lifelong Group is a private company incorporated in 1985. The group diversified into auto component manufacturing in 1995, medical devices in 2005, and e-commerce in 2015. The business has grown from an annual revenue of $500,000 in 1995 to over $175 million today and caters to major customers in the auto industry like Hero Moto Corp, General Motors, ArvinMeritor, Stanley Black & Decker, etc, said the company in a statement.
Due to recent financial difficulties at GoMechanic, the board and shareholders, with support from Stride Ventures, initiated a speedy and widely publicised sale process to ensure the continuity of business, said a statement from the company.
GoMechanic in a business update in February this year stated that over 800 workshops were still active in its network. It also added 3,000 members to its Miles programme, which currently has 60,000 members.
In January this year, co-founder Amit Bhasin in a LinkedIn post accepted the fraud.
After this, Sequoia Capital, along with other investors, ordered a forensic audit of the firm’s business by EY. However, so far the details of the audits have not been shared.
GoMechanic valuation came down to $30 million in March this year, from a high of $300 million
Stride Ventures will receive a chunk of its cleared debt
Debt is above Rs 100 crore
Close to 400-500 employees are part of the slump sale