SoftBank, others in talks to lead $75-million funding in GoMechanic

SoftBank, Malaysia’s sovereign wealth fund Khazanah Nasional Berhad and Norwest Venture Partners are in talks to lead a $75-million funding in GoMechanic, India’s largest aftermarket automotive service and maintenance platform, according to people familiar with the matter. SoftBank is in talks to invest about $30 million in GoMechanic.

“The conversations between the investors and GoMechanic are still going on and one of the investors has also shared the term sheet with the firm,” said a person familiar with the development.

Though SoftBank writes big cheques, it is leading smaller funding rounds in India also.

In December 2021, SoftBank Vision Fund 2 led a $50-million funding round in AI-powered talent firm Sense. Last year, it also led $60 million in payments tech firm JustPay. 

A SoftBank spokesperson was unavailable for comment on the funding round related to GoMechanic.

In India, SoftBank has backed many companies and unicorns or start-ups with over $1 billion in valuation. These include Paytm, Oyo, Ola, Lenskart, PolicyBazaar, FirstCry, Meesho, Unacademy, Zeta, Swiggy, Ola Electric and InMobi.

GoMechanic, a brainchild of four friends — Kushal Karwa, Amit Bhasin, Rishabh Karwa and Nitin Rana — is a 2016-founded Gurugram-based start-up. It is spread across 60 cities with a network of tech-enabled 1,500 workshops in India.

GoMechanic is solving the overarching problem of availability of technology, spare parts and authorised-level trust. It also contends to offer affordability and convenience where a user can book a car service with a few easy taps. A car owner has an option to choose from a portfolio of over 500 services and avail doorstep car pick-up and delivery.

By the first quarter of 2023, GoMechanic aims to expand to over 250 workshops in Tier-2 and Tier-3 cities, bringing its total tally to 1,500 workshops across India.

GoMechanic competitors are Pitstop, GoBumpr, Carpathy and Mahindra First Choice in the aftermarket automotive service.

SoftBank is in talks to invest in GoMechanic after a recent fall in profit at the Japanese tech investor. SoftBank founder Masayoshi Son recently announced that the firm will look at dramatic cost-cutting. Before he does that, investments

in India for the calendar year 2022 (CY22) will fall radically, said sources in the know.

Last year, the company had invested around $3.2-3.5 billion in the Indian start-up ecosystem — almost 10 per cent of the total investment the sector got. For CY22, the investments may not even touch $1 billion.

So far, SoftBank has invested around $450-500 million in India this year. It is looking at a few more that may take its overall investment in India to about $700 million, according to the sources.

The Tokyo-based firm recently witnessed a record $23.4-billion loss on plunging portfolio valuations and foreign currency losses. It lost a vast majority of that money — $17.3 billion — in the VF (Vision Fund) as it marked down the value of holdings such as DoorDash, Coupang, and SenseTime Group. The firm also reported a $6.1-billion foreign exchange loss because of a weak yen.