Kenko Health Shuts Down Amid Fiscal & Operational Turmoil

A major factor in Kenko Health's downfall was its inability to secure a crucial insurance license from the IRDAI.

Kenko Health, a once-promising healthcare startup based in Mumbai, has officially ceased operations due to severe financial and operational difficulties.

Despite raising over $13.7 million from notable investors, including Peak XV Partners, Orios Venture Partners, and Beenext, the company was unable to overcome a critical cash crunch and failed to secure an insurance license.

According to a report by Moneycontrol, a major factor in Kenko Health's downfall was its inability to secure a crucial insurance license from the Insurance Regulatory and Development Authority of India (IRDAI).

Despite significant efforts to meet the stringent regulatory requirements, including the need for domestic capital as the lead investor, the company could not obtain the necessary approval.

The situation worsened when the startup failed to raise an additional INR 220 Cr in 2023, exacerbating its financial challenges and leading to its eventual shutdown.

What Led to the Downfall?

Founded in 2019, Kenko Health quickly gained attention by offering subscription-based health plans that provided benefits such as outpatient department (OPD) services, medications, and healthcare products.

The startup experienced impressive revenue growth, with its income soaring from INR 5 Cr in the financial year 2021-22 (FY22) to INR 85 Cr in FY23. However, this growth was overshadowed by escalating losses, which reached INR 68 Cr in the same period.

Reportedly in July and August, Kenko’s founders, Aniruddha Sen, and Dhiraj Goel, informed employees via email that the company had "run out of funds" and was facing legal action from creditors.

The situation escalated when a debt fund that had extended a loan to the company took it to the National Company Law Tribunal (NCLT), marking the beginning of the end for the struggling startup.

As Kenko Health’s financial crisis deepened, its offices in Mumbai and Bengaluru were closed, leaving approximately 100 employees without salaries, some overdue by more than three months.

Although the founders injected around INR 9 Cr of their personal funds to cover salaries between October and December 2023, the company's financial woes persisted.

The crisis also led to legal actions from third-party administrators (TPAs) responsible for managing Kenko’s claims and payments to hospitals. One TPA filed an FIR against the company over unpaid dues, while another is considering similar legal action.

As the company’s troubles became more apparent, many employees sought new employment, though some remained in limbo, awaiting their unpaid dues.