Investors find financial irregularities by Mojocare; startup lays off employees: Reports

Health tech startup Mojocare's investors have found financial irregularities at the company. As per a report by Moneycontrol, the company inflated its sales bills and overstated its revenues to meet its target.

Major investors that include Chiratae Ventures, B Capital, Better Capital among others, have appointed Deloitte for a forensic audit at Mojocare. The process has been going on for the past 1-2 months, said the Money Control report citing sources.

The report also says that the founders have confessed to investors that they overstated the sales due to revenue target. However, the investors are not considering any legal action against the startup as currently, there is no evidence of siphoning funds.

“Major investors of Mojocare initiated a review of the company’s financial statements. While the analysis remains ongoing, initial findings have uncovered financial irregularities, and it has become apparent that the business model is not sustainable due to a variety of operational and market factors. As a result, Mojocare will be scaling down operations, and the investor group is working with the company through its transition”, investor's joint statement mentioned.

Meanwhile, The Economic Times has reported that Mojocare has laid off about 170 employees after reports of its financial irregularities surfaced. It is also looking to scale down its operations to improve capital efficiency and unit economics.

Mojocare now joins the likes of Go Mechanic, Broker Network, Trell, Zilingo and BharatPe who have accepted indulging in irregularities.