Mojocare investors have uncovered “financial irregularities” in the health and wellness startup and are considering scaling back its operations, they said in a statement on Sunday.
The move follows Bengaluru-headquartered Mojocare, backed by Peak XV, B Capital and Chiratae Ventures, which laid off some 150 staff earlier this week.
In a joint statement, the investors said they were reviewing Mojocare’s financials and their findings so far suggest the business model employed by the startup is “unsustainable due to a variety of operational factors and market”.
The investors did not specify what prompted them to launch an investigation into Mojocare.
“As a result, Mojocare will scale back its operations and the investor group is working with the company through its transition,” they said.
The three-year-old startup, which has raised around $23 million in total, said earlier this week that its business fundamentals have not been up to snuff in recent months.
“Faced with challenging market conditions, at Mojocare we had to make tough decisions to improve our unit economics,” a company spokesperson said earlier this week.