PriyaPatel
TLDR:
Kenko Health, an insurtech startup, has shut down its operations after running out of funds. The company, backed by Peak XV Partners and Orios Venture Partners, has not paid salaries to employees for the last few months. The startup had laid off 20% of its staff last month. The founders, Aniruddha Sen and Dhiraj Goel, hold a majority stake in the company. The shutdown came after a shareholder battle and failed attempts to raise funds. Kenko had applied for a health insurance license and needed fresh funds due to increased regulatory scrutiny on insurtech startups. As of January 31, 2024, the company had raised $13.7 million in funding and posted a net loss of $8.5 million on revenue of $10.9 million in fiscal 2023.
Key Points:
- Kenko Health shuts down due to lack of funds and taken to NCLT by debt fund.
- Founders hold a majority stake; Peak XV Partners and Orios Venture Partners were backers.
- The startup was in talks to raise funds from the Hero Group, but existing investors opposed the plan.
- Kenko raised $13.7 million in funding and posted a net loss of $8.5 million in fiscal 2023.
Full Article:
Kenko Health, an insurtech startup, has formally shut down its operations after running out of funds, according to cofounder Aniruddha Sen. The company, backed by Peak XV Partners (formerly Sequoia Capital India) and Orios Venture Partners, has not paid salaries to its employees for the last few months. Sen informed employees in an email about the situation, stating that the company was unable to infuse equity capital in time due to various internal reasons.
Last month, Kenko Health had laid off 20% of its workforce, or 50-60 employees, as a cost-cutting measure. The startup, founded in 2019, had applied for a health insurance license and was in need of fresh funds after the Insurance Regulatory and Development Authority of India increased scrutiny on venture-funded insurtech startups. Talks to raise funds from the Hero Group were stymied by existing investors who opposed the plan, fearing significant stake dilution.
As of January 31, 2024, Kenko founders Sen and Dhiraj Goel held a more than 36% stake in the company, followed by Peak XV (23%), Beenext (11%), and Orios (8%). The company had raised $13.7 million in funding and posted a net loss of $8.5 million on revenue of $10.9 million in fiscal 2023.
The shutdown of Kenko Health underscores the challenges faced by startup companies, especially in the insurtech sector, in scaling operations, complying with regulatory requirements, and securing funding amid investor opposition and internal financial constraints.
