SUMMARY
Omidyar Network India will stop making new investments and completely transition out of the market by the end of 2024, the venture capital firm said
Omidyar Network India has backed businesses across areas, including education, emerging tech, and financial inclusion, and counts the likes of 1mg, Bounce, and Indifi in its portfolio
The impact investment firm’s India team is looking to raise money externally to start a new fund but the deliberations are at an early stage right now
Investment firm Omidyar Network, a backer of leading Indian startups such as 1mg, Bounce, Indifi, DealShare, HealthKart, and Pratilipi, is shutting down its India operations.
Omidyar Network India confirmed the development in a statement, saying it will “completely transition out of the market by the end of 2024”.
“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 organisation’s portfolio while recognising the long and trusted partnerships that the Omidyar Network India team has built,” the statement said.
TechCrunch was the first to report the development.
A source told the publication that the impact investment firm’s India team wants to reunite and raise money externally to start a new fund but cautioned that it’s too early and the plans may change and deliberations may fail.
Backed by eBay founder Pierre Omidyar, the social impact-focussed investment firm had about $673 Mn cumulative assets under management and its portfolio startups reached 735 Mn people cumulatively till July 2023, as per an investor presentation.
Most recently, Omidyar Network India led dairy fintech startup Digivriddhi Technologies’ (DGV) INR 50 Cr ($6 Mn) Series A funding round.
Last month, fintech startup Kiwi also raised $13 Mn in a Series A funding round led by Omidyar Network India.
The investment firm has backed businesses across areas including education and employability, emerging tech, financial inclusion and well being and property inclusivity.
While India’s startup ecosystem is booming, concerns have been raised about the returns made by venture investors in the country, especially amidst the funding winter over the last two years.
Omidyar Network said in its statement that the decision to pull out of India 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 in 2010.
“Today, there is more Indian-led philanthropic and venture capital than ever before, the country has a vibrant startup sector, and several funds now have a middle and lower-middle income focus as part of their investment strategy. From its outset, the Omidyar Network India team identified these system shifts as critical to impact and worked diligently to help catalyse this change,” the investment firm said.
It is also pertinent to note that 2023 hasn’t been very smooth for Omidyar Network as its portfolio startup ZestMoney, a major name in BNPL that was once valued at $450 Mn, had to shut shop. Its another portfolio startup Doubtnut, which had raised over $50 Mn, also got acquired by Allen Career Institute for $10 Mn.
The development also comes at a time when the venture capital ecosystem in India seems to be going through a churn. A number of partners and fund manages have quit venture capital firms in recent times to either launch their own funds or startups.
On Monday, it was reported that Lightrock India partner and chief financial officer (CFO) Kushal Agrawal will be stepping down from this role at the end of the ongoing month.
