Kenko was a Mumbai-based insurtech startup founded in 2019 by Aniruddha Sen and Dhiraj Goel. It was committed to revolutionising healthcare financing by offering subscription-based health plans that offered benefits like OPD coverage, medicines, doctor fees, lab tests, dental care, and other healthcare products. These facilities were provided on a super low monthly plan.
The company raised 13.7 million dollars in funding from investors like Peak XV Partners, Orios Venture Partners, and Beenext. The startup showed significant revenue growth jumping from Rs. 5 crore in financial year 2021-22 (FY22) to Rs. 85 crore in FY23. However, the financial gains were quickly overshadowed by mounting losses, which escalated to Rs. 68 crore during the same period. The situation further deteriorated when Kenko’s founders, Aniruddha Sen and Dhiraj Goel, communicated to employees via e-mails in July and August, 2024 that the company had “run out of funds” and was facing legal action from creditors.
Kenko’s offices in Mumbai and Bengaluru were shut down, leaving its 100 employees with unpaid salaries, some of which were due for 3 months. Even after covering their employees’ salary for a few months through their own personal funds, the founder’s still continued to struggle financially.
Despite significant funding, Kenko ceased operations in August 2024. The reason being- cash crunch and challenges in obtaining an insurance license. The founder stated that they struggled to secure an insurance license from the Insurance Regulatory and Development Authority of India (IRDAI). This setback combined with a cash crunch ultimately led to the company’s shutdown in August 2024.
The closure resulted in unpaid dues to employees and the company was taken to the National Company Law Tribunal by the investors. Some employees moved on by changing companies quickly but some were still waiting for their unpaid dues for months.
The Kenko startup story states that vision and mission are preliminaries to kickstart a startup but there are other factors that one must keep in mind. The startup faced challenges because of the highly regulated Indian insurance sector, with funding, and regulatory hurdles. This failed case teaches how important it is to have a strong hold on financial management. It’s a common perception among people that startups create a lot of money so they often dive in (although, with a brilliant idea) but what one does with the money and how they regulate it is the real test of whether you create more success for yourself.
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