Mojocare investors have found “financial irregularities” at the health and wellness startup and are move to scale down its operations, they said in a statement Sunday.
The move follows the Bengaluru-headquartered Mojocare, backed by Peak XV, B Capital and Chiratae Ventures, laying off some 150 employees earlier this week.
In a joint statement, the investors said they were reviewing the financials of Mojocare and their findings thus far suggested that the business model employed by the startup is “not sustainable due to a variety of operational and market factors.”
The investors didn’t specifically say what prompted them to launch a probe into Mojocare.
“As a result, Mojocare will be scaling down operations, and the investor group is working with the company through its transition,” they said.
The three-year-old startup, which has raised about $23 million altogether, said earlier this week that its business fundamentals had not delivered in recent months.
“Facing difficult market conditions, we at Mojocare have had to make tough decisions to improve our unit economics,” a company spokesperson said earlier this week.