Based in Mumbai health technology Kenko Health startup has reportedly shut down its operations after five years since its inception.
According to a Moneycontrol Reportwhich was the first to report the development, the startup has run out of cash after raising more than $13 million over the past three years from investors including Peak XV (formerly Sequoia Capital), BEENEXT and Orios Venture Partners.
In August 2021, raised $1.7 million in a pre-Series A funding round.
Employees did not receive salaries
The report indicated that nearly 100 employees They have not received their salaries for several months and a debt fund has taken the company to the National Company Law Tribunal (NCLT) for unpaid dues.
“Unfortunately, the company ran out of funds and we were unable to raise equity capital on time due to various internal reasons. Our company was taken to the NCLT by a debt fund that had given us a loan,” said co-founder Aniruddha Sen. reportedly he said in an email to employees.
It is worth noting that the startup laid off around 60 employees Last year it closed its offices in Bengaluru and Mumbai.
“The company ran out of capital long ago and has since been unable to pay severance and layoff benefits to employees. This is unfortunate, but it is also the harsh reality,” Sen wrote.
He also revealed that the founders personally invested approximately Rs 90 crore between October and December 2023 to cover salaries. “However, that was not enough,” he said.
What offers does Kenko Health offer?
Founded in 2019 by Aniruddha Sen and Dhiraj Goel, Kenko Health specialized in offering subscription-based health plans covering outpatient department (OPD) benefits, medicines, healthcare products, etc.
What caused the failure?
The report added that Kenko’s troubles began when it failed to obtain an insurance license from the Insurance Regulatory and Development Authority of India (IRDAI).
The startup also failed to raise new capital and many investors began to cancel their investments, further intensifying financial pressures.
While the founders say many employees have changed jobs, they previously faced a lack of communication from management.
“In these situations, we did not have the face to reach out or ask any of you for an additional extension of time as we attempted to resolve the ongoing crisis. While it is disheartening that things did not go as planned, we are proud of our beginnings and the accomplishments we achieved together,” they said.
According to Tracxn, as of January 31, 2024, Kenko founders Sen and Dhiraj Goel held a stake of over 36% in the company, followed by Peak XV (23%), Beenext (11%), and Orios (8%).
Kenko witnessed a remarkable rise in revenue from Rs 50 crore in fiscal year 2021-22 (FY22) to Rs 850 crore in FY23. However, despite this growth, the startup faced mounting financial losses, which increased to Rs 680 crore during the same period.
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