Kenko Shuts Operations as It Runs Out of Funds

Nitin Konde, Apoorva Bajj

Aug 28, 2024 — 2 min read

Kenko Shuts Operations as It Runs Out of Funds

According to a media report, Redkenko Health Tech Private Limited, more commonly known as Kenko Health, has ceased operations due to financial and operational issues.

Peak XV Partners, Orios Venture Partners, and Beenext were among the important investors who contributed about $13.7 million to the healthcare business based in Mumbai, which had an initial valuation of almost $60 million. The company's demise was caused by a lack of capital, a difficult business climate, and the inability to obtain an insurance license, even though it had been steadily growing since 2019 and had the support of notable investors.

Around 100 employees working in the company are experiencing distress due to outstanding dues, some of which date back over three months, as a result of the closure of the company's offices in Bengaluru and Mumbai.

Breaking the Sad News Among the Workforce

Founders Aniruddha Sen and Dhiraj Goel confessed in a string of emails in July and August to staff that the company had "run out of funds" and was subsequently taken to the National Company Law Tribunal (NCLT) by investors.

"Our inability to inject equity capital in a timely manner was caused by a number of internal factors, and as a result, the company has exhausted its funding." In a message to staff, Sen informed them that a debt fund that had been loaned to the company had taken it to the NCLT.

The owners addressed the dissatisfied employees' complaints over unpaid dues and a lack of communication in a second email.

A long time ago, the company's money ran out, and since then, it has been unable to settle employee F&Fs. According to their post, "This is disappointing but also the harsh reality," and they revealed that they used about INR 9 crore of their own money to pay salaries from October to December 2023. "But that wasn't sufficient," they stated.

According to the founders, the majority of employees had either found new employment or were actively exploring new prospects. They extended support whenever they could.

Despite Strong Efforts, Unable to Secure Fresh Funding

The creators stated that they had hoped for a settlement and were seeking investor or third-party finance to remain afloat, but that it never came to reality.

"While we worked to resolve the continuing challenge, we were unable to connect with you or ask for any additional time extensions. Although it is disappointing that things did not work out, the company is proud of its roots and the progress it has made since its inception," stated the founders.

In response to accusations of wrongdoing, the founders stated that the assertions were motivated more by disappointment and anguish than malicious intent.

Some troubling claims have been made regarding transferring and similar practices. They invited employees to examine the topic further and made it clear that these were reflections of genuine sadness and distress, not malicious intent.