Omidyar Network Set to Depart from India by 2024

13 Dec, 2023

Omidyar Network Set to Depart from India by 2024

Omidyar Network India, an impact investor firm, has announced its decision to withdraw from the Indian market. The firm will cease making new investments and intends to phase out its presence by the end of 2024.

In a blog post, the Omidyar group stated, “After several months of deliberation, it has been decided that Omidyar Network India will stop making new investments and will completely transition out of the market by the end of 2024. Over the next two months, the board and leadership team will assess how best to manage the organization’s portfolio while recognizing the long and trusted partnerships that the Omidyar Network India team has built.”

Established in 2010, Omidyar Network India has been a significant investor in the Indian landscape, deploying over $500 million in investments. Notably, nearly $150 million was directed towards non-profit investments, while around 70% of the capital supported for-profit ventures.

Originally a part of the parent entity, Omidyar Network India became an autonomous investment advisory firm in 2019. It focused on India-specific investment strategies with a dedicated investment team.

The firm has invested in notable entities like Bounce, Indifi, 1MG (acquired by Tata Digital), and others within the two-wheeler mobility, SME financing, and online pharmacy sectors. Omidyar Network India is currently informing its portfolio companies of its decision to exit.

The blog post highlighted, “This decision was heavily informed by the significant change in context and the growth in the economic landscape that the India-based team has experienced since first making investments there in 2010. Today, there is more Indian-led philanthropic and venture capital than ever before, the country has a vibrant start-up sector, and several funds now have a middle and lower-middle-income focus as part of their investment strategy.”

Despite targeting a $350 million investment in five years, backed by eBay founder Pierre Omidyar, the firm faced challenges. Observers like Shriram Subramanian, Founder of InGovern, mentioned, “Omidyar may have found that the going is tough for continuing investments given that they are a proprietary fund. Also, it looks like their investments have not given the desired returns.”

Among its portfolio companies, Doubtnut was acquired by Allen Career Institute for $10 million in what's believed to be a stress deal. Doubtnut had previously raised $50 million in different funding rounds.

The announcement comes at a time when various startups are navigating survival strategies amidst funding limitations. Instances of job layoffs and cost-cutting measures are prevalent, with some startups, like ZestMoney, ceasing operations amid the funding challenges.

Additionally, the Omidyar group has faced scrutiny from the Union government concerning alleged unauthorized foreign funding.