Health-tech Mojocare closure: Rising gaps seen in corporate governance

Sources in the know said that after the financial irregularities came to fore, investors realised that the business model of Mojocare was not viable

With health tech start-up Mojocare close to winding up its operations, the question of rising gaps in corporate governance is back in focus.

Sources confirmed that Deloitte has submitted its forensic audit of the company to the board.

Sources in the know said that after the financial irregularities came to the fore, investors realised that the business model of Mojocare was not viable.

 “The board was waiting for the forensic audit report. But they had decided along with other investors that since the business model was not viable, shutting operations is a better option.

The final decision will be taken in the board meeting,” said a source.

Deloitte did not respond to a Business Standard email. An attempt to reach out to investors was not successful.

Some investors on the company’s board include Chiratae Ventures, Peak XV Partners and B Capital, among others.

The company had raised $23.7 million and was valued at $67 million.

What is surprising in Mojocare is the background of the two founders.

Ashwin Swaminathan, co-founder, was a former executive of Chiratae Ventures. The other co-founder, Rajat Gupta, has worked with Mobile Premier League (MPL).

Chiratae Ventures has been an investor in the company from its seed stage, when it raised $3 million.

According to media reports, the company has around Rs 80-100 crore, which is one of the reasons why investors decided that shutting operations is a better option than selling it off. 

Mojocare joins the long list of companies, which were impacted due to co-founders’ ignorance on corporate governance. The others include GoMechanic and Zilingo.

In recent times, Info Edge-invested firm 4B Networks is also undergoing a forensic audit.