Kenko cofounder Aniruddha Sen has alleged that red tape at IRDAI was responsible for the events that led to the startup's downfall
The cofounder further alleged that Kenko Health was sent on a “wild goose chase” by IRDAI for two years for an insurance licence
He also claimed that a certain Indian family office was also involved in the startup's undoing, but did not reveal further details about this
Months after Mumbai-based Kenko Health
shut down operations amid a severe cash crunch, cofounder Aniruddha Sen has alleged that red tape at the Insurance Regulatory and Development Authority of India (IRDAI) was responsible for the events that led to the startup’s downfall.
The cofounder further alleged that Kenko Health was sent on a “wild goose chase” by IRDAI for two years for an insurance licence, which led to the “destruction” of the company, its employees’ livelihoods and their collective dreams.
He also claimed that a certain Indian family office was also involved in the startup’s undoing, but added that further details would be shared later.
Sen alleged that while IRDAI’s chairman Debashish Panda initially encouraged startups like Kenko Health to step forward and raise funds to secure an insurance licence, he later took a complete U-turn.
He also claimed that despite meeting the regulatory requirements and converting its compulsorily convertible preference shares (CCPS) into equity, Kenko Health failed to secure an insurance licence from IRDAI. The conversion of shares in particular led to a host of complications, including issuing bonus shares and incurring short-term capital gains taxes due to secondary sales, Sen alleged.
Founded in 2019, Kenko Health quickly rose to prominence, offering subscription-based health plans that included outpatient department (OPD) benefits, medicines, and healthcare products.
The startup reported a strong revenue growth, which surged from INR 5 Cr in financial year 2021-22 (FY22) to INR 85 Cr in FY23. However, the revenue momentum was largely overshadowed by spiraling losses, which ballooned to INR 68 Cr during the same period.
In August 2024, Kenko Health shut shop after running out of funds and failing to secure the insurance licence from IRDAI, which was its singular focus for a year before the shutdown.
As Inc42 reported, the process for securing the insurance licence also resulted in a rift between Kenko’s management and its investors particularly around equity dilution.
It is pertinent to note that venture-funded startups aiming to become insurance companies have been facing increased scrutiny from IRDAI following the spate of financial irregularities at several new-age tech firms. Earlier this year, IRDAI made it mandatory for applicants to be backed by a large domestic investor.
