Bangalore: Jayant Sinha is a cricket enthusiast who has written a script on Ranji Trophy cricketers that will soon be turned into a movie. He has written books and newspaper columns on Indian investments.
Sinha, 46, is also an avid investor who has been in the business of backing and advising enterprises for the last 20 years. He was recently named country head of Omidyar Network India Advisors, the newly formed entity of philanthropic investment firm Omidyar Network.
The global investment firm was established by eBay founder Pierre Omidyar and his wife Pam in 2004 to back and help scale up innovative enterprises that have the potential to catalyse economic, social and political change. It has so far committed $270 million (around Rs1,272 crore) in for-profit and not-for-profit organizations across the world.
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With Sinha’s appointment, Omidyar is taking the firm’s commitment to India to the next level. The firm plans to step up investments and engage more closely with companies in its India portfolio, managing partner Matt Bannick said in an email to Mint.
Catalytic role: Omidyar Network’s Jayant Sinha says capital is not a constraint for the company and it is open to investing even $10 mn in a firm. Hemant Mishra/Mint
To date, the firm has invested $43 million in India, funding entities such as the Rural Development Institute, a non-profit that works for land rights to the rural poor; Quikr, an online classifieds company; and Unitus Equity Fund, which backs microfinance institutions in 19 of India’s 28 states.
Sinha, who comes to Omidyar from hedge fund Courage Capital Management Llc where he was a managing director heading global technology and India-related investments, said a global perspective is an essential attribute for an investor in India.
“I am familiar with both India and the US, which allows me to gauge which businesses, companies, strategies from India might work globally as well; I can also understand a firm’s long-term potential,” Sinha said in a phone interview.
Prior to joining Courage Capital in 2006, he spent 12 years with McKinsey and Co. as a partner in its Boston and New Delhi offices.
An MBA from Harvard Business School, Sinha did his master’s in energy management and policy from the University of Pennsylvania after graduating from the Indian Institute of Technology, Delhi.
Sinha’s father is former finance minister Yashwant Sinha. His wife Punita Kumar-Sinha runs a $2 billion-plus India fund for private equity firm Blackstone Group Lp.
While India has social ventures investors such as Aavishkaar India Micro Venture Capital Fund and Acumen Fund India, Omidyar Network would be the first to seek both for-profit and not-for profit firms to invest in.
The tilt, however, will be a little towards the for-profit firms. “Our main concern is to have the ability to improve people’s lives and you can do that with both for-profit and not-for-profit deals. One difference is that for-profit firms may have better capacity to absorb capital,” said Sinha.
What’s attracting global investors to India is the country’s gradual transformation from a poor and insulated developing country to one of the world’s fastest growing economies.
“We believe the current market provides ample opportunity to invest in for-profit businesses that will drive continued innovation, new jobs, and improved access to information, goods, and services for people in India,” said Bannick.
While the size and speed of growth in India has created considerable market opportunities and the potential to affect millions of lives, it has also created infrastructure challenges and difficulties in reaching a large, diverse population. “We see technology as playing a catalytic role in addressing these challenges, so we aim to invest in technologies that can improve efficiencies and reach millions of people in a cost-effective way,” said Bannick.
Omidyar’s focus will be on microfinance, property rights, alternative technology, and online marketplaces as well as online media, education and public healthcare.
Investments will typically be in the range of $2 million to $5 million.
“Our investments will largely be driven by the opportunities we see. Capital constraints will not prevent us from pursuing the best of these opportunities,” said Sinha, adding that capital is not a constraint for the firm and it is open to investing even $10 million, depending on a company’s business and requirements.
Social enterprises need access to capital from both outside and within India to generate real growth, investors said. “Eighty per cent of what you need is capital. What matters in social investments is access to capital. Handicap to capital is the biggest hurdle for social investors,” said Vineet Rai, chief executive, Aavishkaar India.
According to Acumen Fund India director Varun Sahni, investors looking at backing social enterprises need to be patient and stay the course for seven to nine years for the investments to deliver a payback. “There is a need for investors with larger investment pegs, different ranges, volumes and life cycles,” Sahni said.