Healthcare startup Mojocare laysoff employees; Investors alleges financial irregularities

Mojocare, a healthcare and wellness startup based in Bengaluru, has reportedly laid off 170 employees, or 80% of its total employees count, according to an Entrackr report.

The investors, including Chiratae Ventures, B Capital, and Peak XV Partners, have initiated a forensic audit of Mojocare's financial statements after uncovering irregularities. This comes as the startup's business model is deemed unsustainable due to various operational and market factors.

In a joint statement issued on Sunday, the investors expressed concerns about Mojocare's financial statements and acknowledged the unsustainable nature of the company's business model. Consequently, Mojocare will be scaling down its operations, and the investor group is actively working with the company during this transitional period.

Mojocare joins a list of other Indian startups, including BharatPe, Zilingo, Trell, GoMechanic, and Rahul Yadav's 4B Networks, that have faced scrutiny over their financial reporting and corporate governance practices in the past year.

Responding to reports, A spokesperson from Mojocare categorically denied the accusations of funds being misappropriated, emphasizing their collaboration with investors to find a way forward. The company stated that it is committed to identifying the best course of action for the business and improving its unit economics.

To enhance its unit economics and capital efficiency, Mojocare announced the layoff of 150 to 170 employees across various roles. The decision was made in response to challenging market conditions and the startup's unsuccessful business fundamentals in recent months. Mojocare aims to operate as a lean and resilient team, focusing on profitability moving forward.

Chiratae Ventures holds the largest stake in Mojocare, while B Capital has made the highest investment in the company. Mojocare secured approximately $20 million in funding, led by B Capital Group in August 2022. Other participants in the funding round included Chiratae Ventures, Surge, and Better Capital, with a previous funding round raising over $3 million.

Mojocare operates a direct-to-consumer business model, offering products and consultations with doctors for personalized treatment plans in areas such as reproductive health, fertility, hair care, and weight loss.

The recent events have left retained employees feeling a mix of anxiety and anticipation as they await management's guidance on the company's future direction. While the audit results are yet to be disclosed, employees have expressed concerns about recent inconsistent and opaque revenue growth updates from the leadership.

Mojocare finds itself at a critical juncture as it addresses financial irregularities, streamlines its operations, and seeks a sustainable path forward amidst a highly competitive market.

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