Kenko Health: Kenko Health closes; investors drag insurtech startup into NCLT

“Unfortunately, the company ran out of funds and we were unable to inject equity capital in time due to several internal reasons,” he said.

ET has seen a copy of the email.

With the support of Peak XV Partnerspreviously Sequoia capital of Indiaand Orios Venture Partners, the company has been taken to the National Company Law Tribunal (NCLT) by a debt fund that had provided a loan to the startup, Sen said in his email.

Due to lack of funds, the startup has not paid salaries to its employees for the past few months. Last year, kenko laid off 20% of its workforce, that is, between 50 and 60 employees.

One of the employees told ET: “I have not received any salary for the last four to five months. The company never informed the employees about this situation.”

Discover the stories that interest you

Responding to the employees’ concerns, Sen said in his email, “The sole reason for the absence of any communication with all of you was that a resolution that we had hoped would be finalised within a few weeks ran into several issues and was delayed beyond reasonable timelines. We felt that it would be best if an agreement was reached, we would be in a better position to speak to each of you to resolve your concerns in the best possible manner.” Sen declined to comment on ET’s queries.

Electronic technology

In its June 12 issue, ET reported that Kenko Health was on the verge of closingdue to a dispute between shareholders. The startup was in talks to raise funds from Hero Group and had secured a preliminary non-binding agreement for the investment. However, some existing investors opposed the plan, claiming that the proposed valuation would cause significant dilution of their stake, leading to a stalemate.

Founded in 2019, Kenko had applied for health insurance sure license and needed fresh funding after the Insurance Regulatory and Development Authority of India (IRDAI) increased scrutiny of venture-funded insurance technology startups.

“To comply with the regulatory framework, Kenko needed money, but the deal did not get all the approvals from investors,” a person with direct knowledge of the matter told ET.

After the stagnation, Kenko’s investors began to recoup their investment.

“I have ruled it out and so have others,” said another person, an investor in the Bengaluru-based company.
As of Jan. 31, 2024, Kenko founders Sen and Dhiraj Goel held over 36% of the company’s shares, followed by Peak XV at 23%, Beenext at 11% and Orios at 8%, according to Tracxn.

Kenko has raised a total of $13.7 million in funding to date. The startup provided a subscription-based service covering healthcare expenses in outpatient departments and hospitalization. According to data platform Tracxn, the company posted a net loss of $8.5 million on revenue of $10.9 million in fiscal 2023.