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

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

He also claimed that a certain Indian family office was also involved in the loss of the startup, but did not reveal further details about it.

A few months after arriving in Mumbai Kenko Health stop operations due to severe cash flow crisisco-founder Aniruddha Sen has claimed that red tape at the Insurance Regulatory and Development Authority of India (IRDAI) was responsible for the events that led to the startup’s downfall.

The co-founder also alleged that Kenko Health was sent on a “wild goose chase” by IRDAI for two years to obtain an insurance license, which led to the “destruction” of the company, livelihood of its employees and their collective dreams.

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

Sen alleged that while IRDAI Chairman Debashish Panda had initially encouraged startups like Kenko Health to come forward and raise funds to obtain an insurance license, he later took a U-turn.

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

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

The startup reported strong revenue growth from INR 5 Cr in FY 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 after running out of funds and failing to obtain the insurance license from IRDAI, which was its sole focus for a year before the closure.

As reported by Inc42, the process of obtaining the insurance license resulted in a rupture between Kenko management and its investors particularly around equity dilution.

It is pertinent to note that venture capital-backed startups aiming to become insurance companies have come under increased scrutiny by the IRDAI following a spate of financial irregularities in several new age technology companies. Earlier this year, IRDAI made it mandatory for candidates to be backed by a large domestic investor.