Omidyar Network to exit India by 2024, stops new investments

In a surprise move, ace impact investor Omidyar Network is shutting down its India operations, according to a report by TechCrunch, now confirmed by the group. This comes as a shocking development for the impact venture firm because of its active involvement in the market. It has financed around 75 startups in the South Asian market over the span of the last 13 years. The report cites an internal team meeting on Monday, wherein the team was informed of the decision.

“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,” the group said in a statement.

Omidyar Network had renowned startups feeding on its coffers. The startups backed by the firm include Bounce, Bijak, DealShare, 1mg, Healthkart etc. All have gone on to create major splashes in critical sectors, such as healthcare, last mile commerce among others. Omidyar has also gained significant exits in the country, thus making the announcement even more surprising.

According to Omidyar’s investment deck, it has nearly $673Mn in assets deployed in India, with its startups reaching cumulatively 735 million users across the country.

The firm had recently announced five brand new investments in India in the last two months. Moreover, its executives were actively participating till the beginning of this week. On top of that, the firm is also sponsoring at least one currently running podcast series.

Despite revealing five new investments and its executives actively participating in conferences, the firm confirmed its decision to exit the Indian market. It cited the significant changes in the economic scenario since its initial investments in 2010 as a crucial factor in taking the extreme step.

Omidyar Network was established by Pierre Omidyar, the founder of eBay, and his wife, Pam Omidyar as an impact investment firm. Established in 2004 and operating as a limited liability company and a 501(c0(3) non-profit in the US, it is tasked with the primary goal of addressing pressing challenges in society that are the need of the hour. It pursues its goal by combining impact investing with philanthropy.

Through its dual structure as an LLC and nonprofit, Omidyar Network aims to leverage both the flexibility of traditional investment models and the philanthropic approach to drive social change.

The firm has invested in sectors such as education, financial inclusion, provision for citizens, technology for good and property rights. Their investing portfolio consists of organisations (profit and non-profit) that have smart and scalable ideas to create real and positive change for the world of tomorrow.

This year wasn’t a walk in the park for the firm. It had its share of losses in 2023. The most recent instance being Doubtnut, that had acquired nearly $50 million in funding, but was cut off from the firm’s assets at the selling price of a mere $10 million. That, after earlier receiving an offer 15 times of that from Byju’s earlier. ZestMoney, another startup backed by the firm, in the fintech space, also announced closure, after having raised millions and pivoting a few times.

The impact venture firm will officially wind down by the end of this year and shut down its operations once and for all. However, there are rumours in the wind that the India-based team is planning to pool money externally and start a new fund.