Kenko Health founder claims IRDAI red tape is responsible for shutdown

Kenko co-founder Aniruddha Sen has claimed that red tape at IRDAI was responsible for the events that led to the startup’s demise

The co-founder further alleged that Kenko Health was sent on a “wild goose chase” by IRDAI for two years for an insurance license

He also claimed that a certain Indian family office was also involved in the startup’s demise, but did not reveal any further details.

Located months after Mumbai Kenko Health ceased operations due to a serious financial crisisCo-founder 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 demise.

The co-founder continues so-called that Kenko Health was sent on a “wild goose chase” by IRDAI for two years for an insurance license, leading to the “destruction” of the company, the livelihoods of its employees and their collective dreams.

He also claimed that a certain Indian family office was also involved in the startup’s demise, but added that further details would be shared later.

Sen claimed that while IRDAI Chairman Debashish Panda initially encouraged startups like Kenko Health to come forward and raise money to secure an insurance license, he later made a complete U-turn.

He also alleged that despite meeting regulatory requirements and converting its Compulsorily Convertible Preference Shares (CCPS) into equity, Kenko Health had failed to obtain an insurance license from IRDAI. In particular, the conversion of shares led to a host of complications, including issuance of bonus shares and payment of short-term capital gains tax due to secondary sales, Sen alleged.

Founded in 2019, Kenko Health quickly rose to prominence by offering subscription-based health plans with outpatient department (OPD) benefits, medications and healthcare products.

The startup reported strong revenue growth, rising from INR 5 Cr in financial year 2021-22 (FY22) to INR 85 Cr in FY23. However, the revenue momentum was largely overshadowed by mounting losses, which reached INR 68 Cr during the same period.

In August 2024, Kenko Health closed shop after running out of money and failing to obtain the insurance license from IRDAI, which was its sole focus a year before the closure.

As Inc42 reported, the process for securing the insurance license is also resulted in a gap between Kenko’s management and its investorThis mainly concerns the dilution of shares.

It is pertinent to note that VC-backed startups looking to become insurance companies have faced increased scrutiny from the IRDAI following the spate of financial irregularities in several new technology companies. Earlier this year, IRDAI made it mandatory for applicants to be backed by a major domestic investor.