3 min read.Updated: 05 Oct 2018, 09:30 AM ISTAnirban Sen
Citizen-focusedlegalservices,public platforms on investor's radar
Bengaluru: Omidyar Network India Advisors, the Indian arm of the Silicon Valley-based impact investor, plans to invest roughly $250 million in Indian ventures and organizations over the next four-to-five years, as it looks to bet big on the country’s booming Internet ecosystem, a top company executive said.
In an interview, Omidyar India partner and managing director Roopa Kudva said the firm will look to enter new areas and sectors such as citizen-focused legal services, property rights and public platforms.
Omidyar, which has been in India for about 10 years, has already invested roughly $250 million in the country, backing about 73 organizations and start-ups, with 70% of those being equity investments and the rest being grants.
“We are not like a fund—we are not structured like a fund. We don’t operate like a typical VC (venture capital) fund, but if you think of us as a fund, we typically do $50-60 million (of investments) in India every year. It’s about a $200-250 million fund going forward," said Kudva, who also serves as an independent director on the board of Infosys, among others.
“So, one way to look at us is like a $250-million fund which does about 30% in grants and the rest of it in equity investments. We expect to continue down that path with a fund of that size. The implications are continue with early stage, look for capital-light models and look for potential to scale," Kudvaadded.
Since the beginning of the year, Omidyar has backed a bunch of emerging businesses and start-ups in India including MyUpchar, Pratilipi, Healofy, and Vedantu. Currently, Omidyar, which is bankrolled by eBay founder Pierre Omidyar’s personal wealth, operates mainly across education, financial services, property rights, governance, digital identification and emerging technologies.
“As a new firm in India, I think it’s been a satisfying journey so far. The question is where do we go from here. In India, because of the smartphone penetration and steep decline in data costs, suddenly the ability of entrepreneurs to reach the populations that Omdiyar Network has always cared about has dramatically changed—the underserved, the excluded, among others," said Kudva.
“So, we will continue to work in these sectors, but our focus will be to provide these range of services to the next 500 million people who are going to come online through the internet. It’s not a fundamental shift in what we do, but in the whole lens and the focus... Our goal is to look for highest financial returns plus social impact. So, I think for the kind of work we do, India’s time is now," she added.
Omidyar’s plans for India comes amid a massive funding boom in the country’s start-up ecosystem. Already, this year is starting to resemble the boom that India’s start-up ecosystem witnessed in 2014-15, when a number of relatively mature start-ups raised massive amounts of capital in a short period of time at eye-popping valuations.
Kudva said the current funding environment would not force Omidyar to change tactics in India.
“We are happy (about the current funding environment) as it means more availability of funding for (companies) where we’ve already invested. But we don’t feel pressured to compete because our mandate is to be differentiated at all points in time from the market," said Kudva, who took over as Omidyar’s India head in 2015.
With sectors such as content and education technology becoming increasingly mainstream, Omidyar plans to back promising companies in those businesses.
“If we look at ed-tech, we’ve identified a white space in ed-tech and that white space is Series A. It’s not Series B, not seed. We don’t want to be a seed investor because every year, some 600 ed-tech firms get funded... We think people are willing to come in once a company is ready for a Series B. That I think is our sweet spot," said Kudva.