GoMechanic, a Gurgaon-based car servicing, repairing and cleaning start-up, attracted news in the recent past when it generated 6 million USD in capital. GoMechanic has declined to name the investor, though it said that the funding came from a marquee investor. The investor and its existing shareholders led the funding. Eight months earlier, in March 2023, the company was acquired by Servizzy, a subsidiary of Lifelong Group.
GoMechanic, which has a network of technology-enabled car service centres and engages highly skilled technicians, employs manufacturer-recommended procedures and has the promise of genuine spare parts, was founded by four friends – Kushal Karwa, Amit Bhasin, Rishabh Karwa and Nitin Rana, in 2016. Its comprehensive range of services covers car service, car cleaning, wheel alignment and balancing, custom repairs, denting and painting, and insurance, among others.
GoMechanic projects itself as India’s leading multi-brand car service company, committed to making the car servicing experience hassle-free & easy. They have developed technology solutions that have disrupted the unorganised auto-servicing industry in India by making the solutions more systematic, reliable and cost-effective. GoMechanic has established a strong presence with garages, one at every 5 kilometres in major metro cities such as Mumbai, Hyderabad, Chennai, Delhi, and more.
Setbacks, Acquisition and Funding
Earlier this year, GoMechanic was caught up in financial irregularities and over-inflating figures, and the investors pitched the firm for sale. Its above-mentioned acquisition followed this. This is the company’s first fundraising following its acquisition by Servizzy. However, prior to its acquisition by Lifelong Group’s Servizzy, GoMechanic had received a funding of $62 million from investors, which included Tiger Global Management, Peak XV Partners(formerly Sequoia Capital India and SEA), Orios Venture Partners, and Chiratae Ventures.
Here it deserves a mention that in FY22, GoMechanic suffered losses of Rs. 114 crore on operating revenues of Rs 90.5 crore, per RoC filings. Things went worse when reports of financial misreporting surfaced.
Following its acquisition, GoMechanic appointed a new chief executive officer, Himanshu Arora, and a new chief operating officer, Muskan Kakkar. Both are now co-founders of GoMechanic, too. Before this tenure, Muskan was the Co-founder and Chief Operating Officer of Servizzy. GoMechanic envisages using this new flow of funding to focus on expanding business lines and developing more transparency and cost efficiency internally.
Post the funding, Himanshu Arora said, “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 start-up community. This exemplifies the company’s unwavering and holistic growth and progress.”
Expansion and Growth
Under Muskan’s leadership, GoMechanic has expanded its business lines and now covers ‘GoMechanic Service Business’, ‘GoMechanic Spares,’ and ‘GoMechanic Accessories’. By the end of this fiscal, the startup expects to double down on revenues from ‘GoMechanic Spares’ and ‘GoMechanic Accessories.’ The company has also ventured into the luxury and premium car services market with GoMechanic LUXE.
The luxury car service centres of GoMechanic, which falls under the brand ambit of LUXE, specialise in servicing brands like Audi, BMW, Mercedes, and Porsche, and they together manage over 600 luxury cars per month on an average.
Post the acquisition, the company seems to be on an impressive growth path. Presently, GoMechanic claims to handle an influx of 800 cars daily. According to the company, its MILES membership program has also experienced profitable growth and its monthly membership sales have increased by 72 per cent in October 2023 compared to April 2023.
In fact, the company’s financial health seemed to have improved following its acquisition by Servizzy. Between April and June 2023, GoMechanic serviced more than 68,500 cars across India. This performance marks a remarkable 30 per cent growth in both service revenue and Gross Merchandise Value (GMV) during the initial quarter following the acquisition in March 2023.
Notably, the start-up’s ‘Miles Membership’ loyalty program, which includes GoMechanic’s Annual Maintenance Contract, also experienced an unprecedented surge in the April- June 2023 quarter. Over 10,000 new Miles Memberships were activated from April to August 2023 alone.
It seems after this fresh lease of funding, GoMechanic’s growth potential would receive a fillip under the new leadership, and the start-up will be better able to address the demands of a fast-growing industry.
