SUMMARY
- Kenko Health, despite raising $13.7 million in funding, shut down due to financial difficulties and an inability to secure an insurance licence.
- The startup saw impressive revenue growth but suffered significant losses, with ₹68 crore in losses during FY23.
- Legal actions from creditors and third-party administrators accelerated the company’s downfall, leaving employees with unpaid salaries and seeking new opportunities.
Kenko Health, a Mumbai-based healthcare startup that once held promise, has shut down operations after grappling with significant financial challenges and regulatory setbacks, as reported by Moneycontrol.
Despite raising over $13.7 million in funding from prominent investors like Peak XV Partners, Orios Venture Partners, and Beenext, the company was unable to stay solvent due to a severe cash crunch and its failure to secure an insurance licence.
Founded in 2019, Kenko Health gained early traction with its subscription-based health plans, offering outpatient department (OPD) benefits, medicines, and healthcare products. The startup’s revenue grew sharply from ₹5 crore in FY22 to ₹85 crore in FY23. However, this growth was overshadowed by rising losses, which ballooned to ₹68 crore in the same period.
The company’s downfall was linked to its inability to obtain a critical insurance licence from the Insurance Regulatory and Development Authority of India (Irdai). Despite efforts to meet the regulatory requirements, including the need for domestic capital to be the lead investor, Kenko failed to secure the necessary approval. This setback, coupled with unsuccessful attempts to raise ₹220 crore in 2023, intensified financial pressures, ultimately forcing the company to cease operations.
The situation further deteriorated in July and August when Kenko’s founders, Aniruddha Sen and Dhiraj Goel, notified employees via email that the company had “run out of funds” and was facing legal actions from creditors. The firm was brought before the National Company Law Tribunal (NCLT) by a debt fund that had previously loaned money to them. Offices in Mumbai and Bengaluru were shuttered, leaving approximately 100 employees in uncertainty with unpaid salaries—some overdue by more than three months. Although the founders infused ₹9 crore of personal funds to pay salaries between October and December 2023, the financial crisis persisted.
Additionally, legal actions were filed by third-party administrators (TPAs) responsible for processing Kenko’s claims, with one TPA lodging an FIR over unpaid dues, and others considering similar steps. As the company unraveled, many employees sought new jobs, while others remained in limbo awaiting their unpaid dues.
