Sequoia-Backed GoMechanic Inflated Revenue, to Fire 70% Staff
- 60 centers used to boost numbers, divert funds, EY alleged
- Prospective investors pulled out of deal talks after EY report
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Due diligence conducted by EY for prospective GoMechanic investors showed that the Indian auto-services firm inflated revenue, the latest headache for its backer Sequoia Capital in the South Asian nation.
EY’s research alleged that about 60 of the more than 1,000 GoMechanic service centers may have violated accounting norms to overstate revenue and divert funds, according to people with knowledge of the matter, who asked not to be identified discussing sensitive information.