Omidyar Network outguns local VCs in startup bets

MUMBAI: Impact investment firm Omidyar Network is doubling down on its India play, leaving several homegrown venture capital firms gasping when it comes to investments in 2018.

The Indian arm of the Silicon Valley-based investing firm started by eBay founder Pierre Omidyar has closed six investments within the first four months of 2018 in India and has set itself up for a robust deployment strategy in the country over the next two years. “In terms of plans for commitments going forward, we have committed a little under $250 million over the last six years towards India and we expect to invest between $50 million and $60 million every year for the next couple of years,” Roopa Kudva, MD for Omidyar Network India, told ET. “If you look at it in terms of a fund, that would be equivalent to a $200-million fund in the traditional venture capital ecosystem.”

For Omidyar Network India, the six investments made this year in Doubtnut, Pratilipi, Healofy, Vedantu, Kaleidofin and Affordplan are in line with its focus on investing in business models that target the next 500 million first-time internet users over five years.


Omidyar is looking to invest in sectors that will be key in breaking the barriers of internet adoption for the next half billion internet users across financial inclusion, education, emerging technology, governance and citizen engagement, property rights and digital identity.

“The next half-billion users are very different from the first wave of internet users, and as far as this population is concerned, we have been early in identifying barriers to internet usage for them. Unless we build successful businesses that address these barriers for them, it will be very difficult to take this population from basic use of the internet such as social media and communication to more sophisticated users who transact and pay online,” Kudva explained.

Towards this end, the impact investing firm is looking at very early stage deals including seed, Series A and selective Series B investments across businesses that adapt to social and cultural contexts across local language, financial services, technology for transportation, access to jobs and health among others.

The investments will be made across businesses in semi-urban to urban areas with large-impact audiences and Omidyar is looking to co-invest with traditional VCs at later stages in such models. “From a risk perspective, it is important for us to be in a space where we are not the only investor. We would like to enter a space early and continue till a point where it becomes interesting and attractive for other investors as well,” Kudva told ET.
For 2018, Omidyar Network will look at investments in businesses that revolve around utilitarian products and services catering to the mass market. The firm is also looking to tap into its global network to recreate successful global businesses in India and vice versa to expand its portfolio reach.