With financial irregularities under scrutiny, healthtech startup Mojocare contemplates closure

Mojocare, a healthtech startup, is on the verge of closing down because its investors do not see any viable buyout options. ET reported that the company has been found to be inflating its revenue and expenses, even though the board of the company is likely to meet and discuss the anticipated forensic audit report later this month.

“Mojocare is still exploring to consolidate with a large player,” said media sources. “If they fail to find a deal, the firm is going to return the remaining money to its investors.”

Chiratae, B Capital, Sequoia India’s Surge, and Better Capital, among others, have backed Mojocare. The Bengaluru-based business raised a total of $24 million and had a recent valuation of roughly $70-75 million.

The aforementioned investors requested a forensic audit after discovering financial irregularities. Investors were persuaded by the preliminary investigation that Mojocare’s business model cannot be sustained due to numerous operational and market factors.

As a result, the company nearly crippled its operations and let go of more than 80% of its staff. In a clean-up effort by the investors and company, over 200 workers were let go.

To the co-founders of Mojocare, Rajat Gupta and Ashwin Swaminathan, the forensic audit is expected to provide a clean bill of health.

Mojocare has joined the ranks of a number of growth stage businesses that have fabricated false revenue-expense ratios and have been subject to forensic audits. As a result of being exposed as fabricating a network of workshops in order to inflate its numbers, Chiratae and Sequoia-backed GoMechanic was shut down, and Info Edge decided to pursue a forensic audit against 4B Networks. In addition, financial irregularities, fraud, and founders’ personal gains were discovered with BharatPe, Trell, and Zilliogo.