Kenko Health co-founder alleges regulatory roadblocks led to startup’s collapse
Mumbai-based startup Kenko Health offered subscription-based health plans that included outpatient department benefits, medicines, and healthcare products.
Aniruddha Sen, Co-founder of health insurtech startup , which shut shop in August this year due to a cash crunch, criticised the Insurance Regulatory and Development Authority of India (IRDAI) for allegedly obstructive practices, citing regulatory obstacles in obtaining an insurance license as the main reason for its downfall.
Sen recounted a two-year battle with IRDAI to obtain an insurance license, citing bureaucratic obstacles that hindered innovation and capped their entrepreneurial aspirations.
“For two years, Dhiraj and I went on a wild goose chase with folks at the IRDAI in the hope of securing an insurance licence. The journey started with a public call from the chairman for startups to step forward, raise capital and apply for a licence. Against better judgement and hindsight of past experience, we did so, only to face an onslaught of obstacles that culminated in the destruction of our company, our employees’ livelihoods, and our collective dreams,” Sen explained in a LinkedIn post.
Sen described how a senior finance department official allegedly showed open disdain for entrepreneurs, making statements that Sen described as "discouraging" and "detrimental to India’s startup ecosystem". “During one meeting, she said outright that we ‘bring shame to the country,’” he revealed, suggesting that IRDAI officials viewed private-sector success and wealth creation as shameful.
He further alleged that the department’s attitude seemed to favour a select few—government-run companies and enterprises owned by wealthy elites—while blocking ambitious entrepreneurs.
Sen also claimed that specific regulatory demands added to the burden and the startup was not provided with clear communication on the application’s status. “We had to convert our Compulsorily Convertible Preference Shares (CCPS) into equity, which led to a host of complications, including issuing bonus shares and incurring short-term capital gains taxes due to secondary sales,” he shared.
According to Sen, despite meeting these requirements, the IRDAI never informed Kenko Health that its application would be denied. “He told us, in no uncertain terms, that we “don’t fit the profile” of promoters for an Indian financial services company. He dismissed us, saying that only wealthy, well-connected individuals were suited for such roles,” he recounted, calling the chairman's attitude as “dismissive and condescending.”
He questioned the IRDAI’s commitment to fostering innovation, particularly when other regulators like SEBI and RBI are embracing change. “The insurance sector, in particular, remains stagnant, filled with outdated practices and run by individuals who have no understanding of modern consumer needs, let alone technology,” he said.
Sen suggests a "special team" should reform IRDAI and attract investment, urging government officials like Vivek Joshi, who was posted as Secretary to the Government of India, Department of Financial Services, Ministry of Finance, to address regulatory transparency and startup challenges.
Concluding his post with a call for accountability, Sen wrote, “They destroyed my company, my livelihood, and the hopes of everyone involved. And someone must pay for that.”
Mumbai-based startup Kenko Health, founded in 2019, offered subscription-based health plans that included outpatient department benefits, medicines, and healthcare products.
In February 2022, Kenko secured $12 million in its Series A round led by Sequoia Capital India, with participation from Beenext, Orios, 9Unicorns, and Waveform Ventures.
Edited by Kanishk Singh