Mojocare's investors found financial irregularities and shrank the startup after layoffs

Mojocare is a Bengaluru direct-to-consumer healthcare and wellness startup, founded in May 2021 by Ashwin Swaminathan and Rajat Gupta, that sells products and doctor consultations for issues such as fertility, hair care and weight loss. It raised about $20 million in a round led by B Capital Group in August 2022 on top of a little over $3 million earlier. On Saturday 17 June 2023 it said it had laid off 150 to 170 staff to improve its unit economics, adding that 'business fundamentals have not worked out'.

A day later a joint statement from investors including Chiratae Ventures, B Capital and Peak XV Partners said a review of its financial statements had uncovered 'financial irregularities' and that the business model was 'not sustainable due to a variety of operational and market factors'. The investors started a forensic audit, and Mojocare was to scale down operations. The Economic Times placed it alongside BharatPe, Zilingo, GoMechanic and others whose financial reporting lapses surfaced that year.

Mojocare 'categorically' denied accusations of money being taken out of the company. Several employees told ET that leadership had been opaque about revenue growth; one claimed the company had been inflating sales volumes and misreporting gross merchandise value as revenue for months. These are employee allegations, and the audit findings had not yet been released.

150–170 layoffs and a forensic audit; the company is scaling down after raising about $20M led by B Capital plus a little over $3M earlier.

The company reported growth that, per employees, leadership was opaque about, and investors found irregularities in the numbers.

One employee alleged gross merchandise value was reported as revenue and sales volumes were inflated.

Unit economics did not work, which the company itself cited when it announced the layoffs.

Growth at all costs in a crowded D2C market left little room when funding conditions tightened.

Growth-at-all-costs reporting hides weak unit economics until investors audit; counting transaction value as revenue can mask a model that doesn't work.

Investors said the audit was ongoing and that they were working with the company through its transition. Mojocare said it would run as a small team while it worked out a path to profitability, and the Economic Times report had no audit findings yet.