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    Go Mechanic

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    Zeeshanul Haque
    Go Mechanic, a 7-year old car service startup, has laid off 70% of its workforce and asked the remaining 30% to work for free for 3 months due to major financial issues. The company is losing 200% of its revenue and approached Softbank for funding at an inflated $1.2 billion valuation, but an audit found they had inflated their books. Once this was revealed, Softbank and other investors pulled out, leaving the company in need of funds to continue operations but having lost trust from the investor community due to the fraud. As an advisor, you must devise strategies to make Go Mechanic a leader in car servicing again, raise necessary capital, improve profitability, launch marketing and PR

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    Go Mechanic

    Uploaded by

    Zeeshanul Haque
    258 views2 pages
    Go Mechanic, a 7-year old car service startup, has laid off 70% of its workforce and asked the remaining 30% to work for free for 3 months due to major financial issues. The company is losing 200% of its revenue and approached Softbank for funding at an inflated $1.2 billion valuation, but an audit found they had inflated their books. Once this was revealed, Softbank and other investors pulled out, leaving the company in need of funds to continue operations but having lost trust from the investor community due to the fraud. As an advisor, you must devise strategies to make Go Mechanic a leader in car servicing again, raise necessary capital, improve profitability, launch marketing and PR

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    Go Mechanic, a 7-year old car service startup, has laid off 70% of its workforce and asked the remaining 30% to work for free for 3 months due to major financial issues. The company is losing 200% of its revenue and approached Softbank for funding at an inflated $1.2 billion valuation, but an audit found they had inflated their books. Once this was revealed, Softbank and other investors pulled out, leaving the company in need of funds to continue operations but having lost trust from the investor community due to the fraud. As an advisor, you must devise strategies to make Go Mechanic a leader in car servicing again, raise necessary capital, improve profitability, launch marketing and PR

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    258 views2 pages

    Go Mechanic

    Uploaded by

    Zeeshanul Haque
    Go Mechanic, a 7-year old car service startup, has laid off 70% of its workforce and asked the remaining 30% to work for free for 3 months due to major financial issues. The company is losing 200% of its revenue and approached Softbank for funding at an inflated $1.2 billion valuation, but an audit found they had inflated their books. Once this was revealed, Softbank and other investors pulled out, leaving the company in need of funds to continue operations but having lost trust from the investor community due to the fraud. As an advisor, you must devise strategies to make Go Mechanic a leader in car servicing again, raise necessary capital, improve profitability, launch marketing and PR

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    GO (Goa Gone) Mechanic

    The 7-year-old startup – Go Mechanic’s business is pretty simple. Its services


    Cars. It’s a network of technology enabled car service centers, offering a
    seamless service experience at the convenience of a tap. It lures local garages in
    to a tie-up and rebrand them. A customer would simply fire up the app and
    demand a service. But this segment’s margins are wafer thin. Now to the other
    problems –
    Go mechanic has laid off 70% of its workforce and has asked the remaining
    30% of the workforce to work for free for the next three months. The company
    is going in losses (200% of their revenue) and they do not have much runway
    left. With no money left to run their business they sought out to raise funds from
    investors. They approached SoftBank with a valuation of $1.2 billion which is 4
    times their actual value. However, SoftBank was only comfortable with
    disbursing money for a valuation of $650 million – approximately half of their
    ask. Go mechanic and SoftBank got into negotiations and the latter, to be on the
    safer side asked EY an auditing firm to conduct a forensic audit of Go
    Mechanic. The reports showed that Go Mechanic had inflated its books and its
    assets. Once these reports were out, SoftBank pulled out of this deal and shared
    these reports to Sequoia Capital and Tiger Global – two of the largest
    shareholders in the company with an accumulated stake of 35%. After the
    reports were circulated in the media, Amit Bhasin the owner of Go Mechanic,
    posted a thread on LinkedIn apologizing for committing financial fraud. The
    exact words he used in the post were “grave errors in judgement, particularly in
    regard to financial reporting”, which he later went on to edit and removed the
    word “grave” to hide the magnitude of the fraud. Now Go Mechanic finds itself
    in a deadlock- it needs funds to continue its operations and it has burnt its
    bridges when it comes to VC’s and PE’s because of the fraud. There are no
    investors interested in giving funds to the company. Finally the business model
    is not working very well for them either – How many of us think of Go
    Mechanic when we are required to service our car – Exactly, Not many of us!
    TASK AT HAND
    You are an advisor to the management of the board of Go Mechanic. You are
    required to:
    - Make Go Mechanic, synonymous with Car servicing with their business
    model clearly not able to create an impact.
    - With no more money to continue operations, and with investors losing
    trust in your company come with different avenues to raise necessary
    capital for the functioning of the business.
    - Losses have amounted to approximately 200% of their revenues, devise
    revamped revenue models to steer the business into profitability.
    - Present 3 marketing campaigns to garner more consumers on your
    platform.
    - Devise 3 PR campaigns to address the financial frauds you’ve committed
    and gain the reputation of the brand back.
    - The company has fired 70% of its workforce – formulate necessary
    policies to compensate the employees for the same.
    - Defend your company’s decision to ask its employees to work for the
    company for free for the next three months, and come with a detailed
    implementation of how their deferred salaries will be paid once the
    company turns profitable.

    DELIVERABLES
    - A ppt with minimum but not limited to 8 slides.
    - A minimum of one creative to support your marketing campaigns
    - A press release
    - An excel file to support your financials.

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