Exclusive: GoMechanic Cofounders Eye New Startups Six Months After Fake Revenue Fiasco

More and more second-time startup founders and serial entrepreneurs are looking at whitespaces in the tech ecosystem to start up again. And GoMechanic cofounders Rishabh Karwa and Nitin Rana are two more noted entrepreneurs joining this bandwagon.

Rishabh and Rana are currently working on two separate and unnamed new startups, even as dust is far from settled on the GoMechanic front. Indeed, it was just over six months ago that the controversy broke out.

Rishabh and Rana are two of four cofounders of GoMechanic, along with Kushal Karwa and Amit Bhasin. We don’t know much about Rana’s new startup, but more details are available about Rishabh’s latest venture.

For one, his X (Twitter) bio reads, ‘Building for Local Storefronts around the World’, and his recent tweets indicate that the GoMechanic cofounder has spent a considerable time in the US.

The other GoMechanic cofounder Rana is working on a new startup and “Building Travel & Hospitality Product for Indian Subcontinent and World”, as per his LinkedIn profile.

Neither have registered a new entity in India or the US yet as per Inc42’s checks on official portals.

Rishabh has dropped hints about his next business since June this year.

“We are trying to create [sic] is a Suspension Score for Business to check the risk their Business Profile is facing. Truly believe it can help a lot of Small Store Owners avoid a lot of frustration!” Rishabh revealed at the end of a thread on July 19 about the risk for businesses being red-flagged by Google Business, and therefore Google Search and Google Maps.

Rishabh did not respond to questions sent via an X (Twitter) direct message about his new venture or indeed what happened towards the end at GoMechanic after its controversies came under the spotlight.

Life After GoMechanic

The Peak XV (Sequoia) backed startup’s founders admitted to financial misreporting, and was acquired by a consortium led by the Lifelong Group, which is a majority shareholder in GoMechanic rival Servizzy.

The deal saw write-offs by all GoMechanic’s equity investors, while venture debt investors managed to recover some funds. Sources told Inc42 at the time that the distress sale was executed at INR 220 Cr (roughly $27.5 Mn), roughly half of the total lifetime funding raised by GoMechanic.

Most importantly, GoMechanic founders were not part of the deal and did not get any equity in the acquiring company.

While only one cofounder — Amit Bhasin — has publicly spoken about the misreporting and fake revenues, in private, all four cofounders are said to have admitted to the discrepancies that eventually turned GoMechanic’s fate.

As per sources close to one of GoMechanic’s key investors, punitive or legal action against the founders, including Rishabh and Rana, has not been ruled out, though nothing is certain as yet.

For legal action against founders, a consensus has to be reached by all the shareholders in the company.

Last month, sources close to GoMechanic told Inc42 that the matter is still sensitive, indicating that the deal may not have been finalised. But Servizzy has clearly taken over GoMechanic’s operations as the latter’s website is now seemingly being run by Servizzy’s parent entity Service Easy Technology Private Limited.

What Are GoMechanic Cofounders Cooking Up?

Nevertheless, Rishabh has been quite vocal about starting anew, posting about the journey of building a new product and startup. His social media posts about Figma plugins and projects indicate some degree of progress.

“The good thing about losing something you have built is you get to experience building something new again!” he tweeted in early June, followed by “0 to 1 can be the most stressful & most fun time simultaneously!” one month later.

It’s clear that Rishabh is looking to solve problems for businesses that have an online listing and want to improve discoverability. He regularly asks his timeline for questions about Google Business APIs and other listings-related problems that businesses currently face.

Second-time founders starting again from scratch is a major trend that has fuelled new business creation in the past three years. And while Rishabh Karwa has not yet raised funds to build a new product as far as we know, the question is will the controversies around GoMechanic change anything for his new venture or Rana’s.

Despite controversies in their previous companies, the likes of Rahul Yadav, Ashneer Grover have raised funds from investors — Yadav’s Broker Network raised over INR 280 Cr by itself.

While Grover is caught in many legal battles and Yadav is likely to see one too, the GoMechanic cofounders seem to have so far evaded court drama. Is it because the four confessed to their malfeasance? Or is there more trouble on the horizon even after the company has been sold?

Rishabh Karwa as well as Rana’s next ventures, might well secure more funding than GoMechanic — it’s not unheard of in the case of new startups from serial entrepreneurs — and this might actually turn out to be the defining achievement of their careers.

But at least for the first few years, there will be a nagging doubt about both cofounders’ new ventures from the overhang of the GoMechanic controversy. We saw this in the form of questions around Yadav’s Broker Network in the early days and even for Grover’s Third Unicorn now in its first few months.

So besides taking on giants such as Google or Apple and other existing giants in their respective industries, both Rana and Rishabh Karwa would also have to fight perception battles of their own.

Correction Note | August 01, 2023; 12 PM

• An earlier version of this story said Broker Network had raised $280 Mn. This has now been corrected to INR 280 Cr

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