Kenko Health, a Mumbai-based healthcare business, has officially shut down after experiencing serious financial and operational issues. According to Moneycontrol, the once-promising company, backed by well-known investors such as Peak XV Partners, Orios Venture Partners, and Beenext, was forced to close due to a lack of additional capital and an important insurance license.
Kenko Health, founded in 2019, quickly gained popularity in the healthcare industry by providing subscription-based health plans that comprised outpatient department (OPD) coverage, medications, and healthcare items. The company had significant growth, with sales increasing from Rs 5 crore in FY2021-22 (FY22) to Rs 85 crore in FY23.
Kenko Health’s decline can be traced back to its inability to get a critical insurance license from the Insurance Regulatory and Development Authority of India (Irdai). The startup’s attempts to meet the onerous regulatory criteria, including the demand for domestic money as the lead investor, failed. This crucial setback was reinforced by the company’s inability to raise Rs 220 crore in 2023, which exacerbated the financial strains that eventually led to its closure.
The situation deteriorated after Kenko’s owners, Aniruddha Sen and Dhiraj Goel, disclosed the company’s severe circumstances to employees via email in July and August. The emails stated that Kenko Health had “run out of funds” and was facing legal action from creditors.
As the financial situation deteriorated, Kenko Health was obliged to close its offices in Mumbai and Bengaluru, leaving around 100 employees with unpaid salaries. Some employees stated that their salaries had been late for more than three months. Despite the founders’ efforts to contribute around Rs 9 crore of personal funds to cover salaries from October to December 2023, the company’s financial problems persisted.
Kenko Health’s financial collapse prompted legal action from third-party administrators (TPAs) in charge of processing the company’s claims and organizing payments with hospitals. One TPA filed a FIR against Kenko for unpaid dues, and another business is apparently mulling similar legal action.
With the company’s demise, numerous Kenko employees had to look for new jobs. While some have moved on, others are stuck in limbo, waiting for their unpaid bills.
Read More – Titan Capital raises Rs 200 crore for a new fund to support portfolio startups
