Kenko Health, an insurtech startup, is facing the possibility of shutting down.

Current Situation: Kenko Health, supported by Peak XV Partners (formerly Sequoia Capital India) and Orios Venture Partners, requires funds to comply with the insurance regulator's demands. The startup was nearing a deal to secure capital from the Hero Group, but disagreements among some current investors, who faced significant stake dilution at the proposed valuation, prevented the agreement, sources indicated.

Why It Matters: Shareholders are now reportedly writing off their investments in the 2019-founded company, which hasn't paid its employees for the past 2-3 months.

Official Response: In response to ET's inquiry, cofounder Aniruddha Sen stated, "Due to confidentiality obligations, we cannot offer any comments at this stage. We will be open to discussing all your questions and other points at a later stage once we have crystallized the next steps."

Broader Context: Kenko's difficulties stem from the need for new funding, exacerbated by the Insurance Regulatory and Development Authority of India's increased scrutiny of venture-backed insurtech startups. Last month, ET reported that the regulator requires applicants aspiring to become insurance companies to have substantial backing from a large domestic investor. Additionally, the promoters and founders need to possess significant net worth.