Failure Analysis
Kenko died from a toxic combination of adverse selection spirals and unsustainable customer acquisition economics, rooted in a fundamental misunderstanding of insurance mathematics. The...
Kenko Health \India
Kenko Health attempted to solve India's healthcare affordability crisis through a subscription-based health insurance alternative. The psychological hook was powerful: middle-class Indians paying ₹999-2999/month for unlimited doctor consultations, diagnostics, and medicine discounts without the bureaucratic nightmare of traditional insurance claims. The value proposition targeted the 'missing middle'—families earning ₹25,000-75,000/month who couldn't afford comprehensive insurance but feared catastrophic medical expenses. Kenko promised instant gratification (no waiting periods), transparency (fixed monthly fees), and dignity (no claim rejections). For investors, this was the 'Stripe for healthcare'—digitizing a massive, inefficient market where 80% of Indians lack health coverage. The wedge was behavioral: converting out-of-pocket healthcare spenders into predictable subscribers by bundling preventive care with financial protection.
Discover the reason behind the shutdown and the market before & today
Market Analysis
India's digital health market has bifurcated into three distinct winners since Kenko's collapse, none of which replicated their consumer subscription model. First, the telemedicine...
Startup Learnings
Subscription models in healthcare only work with strict adverse selection controls. Kenko proved that 'insurance without underwriting' is mathematically impossible—you cannot offer unlimited benefits...
Market Potential
India's health insurance penetration remains catastrophically low at 38% (2024), with only 15% holding comprehensive coverage beyond government schemes. The addressable market is staggering:...
Difficulty
In 2019, Kenko faced brutal infrastructure gaps: fragmented hospital networks requiring manual integrations, no standardized EMR systems, cash-based pharmacy supply chains, and regulatory ambiguity...
Scalability
Kenko's model had capped scalability due to supply-side constraints. Unlike pure software, each new subscriber required: (1) incremental telemedicine doctor capacity, (2) negotiated discounts...
Rebuild & monetization strategy: Resurrect the company
Execution Plan
Phase 2
Month 3-4: Build Vercel dashboard showing employers real-time aggregate health improvements (avg HbA1c, hospitalization avoidance, productivity gains). Integrate ABDM for automated health record pulls. Launch AI meal planner using GPT-4 fine-tuned on Indian cuisine + CGM response data. Sign 2 paying employer clients at ₹4,000/employee/month (discounted from ₹5,000). Goal: ₹4 lakh MRR, 100 active patients.
Phase 3
Month 5-8: Build predictive glucose model using 6 months of CGM data (AWS SageMaker). Launch consumer co-pay option (₹2,499/month for employee family members) via Razorpay subscriptions. Hire 2 full-time endocrinologists + 5 health coaches. Partner with PharmEasy API for automated medication delivery. Goal: 500 patients, ₹25 lakh MRR, 65% gross margin.
Phase 4
Month 9-12: Approach top 3 health insurers (Star, HDFC Ergo, ICICI Lombard) with data showing ₹1.2 lakh average savings per managed diabetic. Offer 'Diabetes Management as a Service' API they can white-label for their corporate clients. Raise Series A (₹15-20 crore) from healthcare-focused VCs (HealthQuad, Elevar Equity). Expand to hypertension (overlapping patient base). Goal: 2,000 patients, ₹1 crore MRR, signed API partnership with 1 major insurer.
Monetization Strategy
Three revenue streams with different margin profiles: (1) B2B Employer Subscriptions (₹5,000/employee/month, 50% gross margin after medical costs, targeting 10,000 corporate diabetics by Year 2 = ₹50 crore ARR), (2) Consumer Co-Pay (₹2,499/month for family members, 40% margin due to higher support costs, targeting 5,000 consumers = ₹15 crore ARR), and (3) API Licensing to Insurers (₹2,000/managed patient/month paid by insurers, 80% margin as we provide data/software only, targeting 20,000 patients via 2-3 insurer partnerships = ₹48 crore ARR). Total Year 2 target: ₹113 crore revenue, ₹55 crore gross profit. The key insight: we're not selling insurance, we're selling measurable health outcomes. Employers pay because we reduce absenteeism (diabetics miss 5-7 extra days/year) and long-term insurance premiums. Insurers pay because we prevent ₹3-5 lakh hospitalizations (dialysis, amputations, cardiac events). Patients pay because we're cheaper than the ₹50,000-80,000/year they currently spend on uncoordinated diabetes care. The unit economics work because Type 2 Diabetes costs are predictable and capped: ₹800/month in CGM sensors + ₹400 in doctor time + ₹300 in medication delivery + ₹500 in tech/ops = ₹2,000 total cost against ₹5,000 revenue from employers. Unlike Kenko's open-ended coverage, we have a defined medical protocol with measurable endpoints (HbA1c reduction), making this a SaaS business with healthcare margins, not an insurance business with SaaS dreams.
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