Omidyar Network India will stop making new investments and completely transition out of the market by the end of 2024, said the company in a press release from December 12, 2023. The news will significantly impact the start-up organisations that received funding from the company including 1Mg, Bijak, Credr, Doosra, DoubtNut, Entri, Kiwi, PrivaSapien, Quickr, Vedantu and many others.
“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,” said Omidyar. Meanwhile, the press release also added that “these changes are unrelated to Omidyar Network and their ongoing work” meaning that they only affect the company’s India-based team which became an independent entity in 2018.
According to the company blog, the decision was made due to the “significant change in context” and the “growth in the economic landscape” that the India-based team experienced since first making investments there in 2010. The company said that today India has a lot of philanthropic and venture capital, a vibrant start-up sector, and several funds with a middle and lower-middle-income focus as part of their investment strategy.
Meanwhile, entrepreneurs reacting to the news said Omidyar’s exit points towards a challenging period for start-ups in the future.
Challenges in the Startup Space: The broader startup landscape in India has been facing challenges, including a funding winter and companies taking drastic measures to survive, such as layoffs and controlled expenses. The closure of firms like ZestMoney indicates a tougher…
— saikiran appalla (@saikiranappall) December 12, 2023
In 2022, the Central Bureau of Investigation (CBI) accused Omidyar and nine other organisations of conspiring to illegally facilitate the registration and renewal of Foreign Contribution (Regulation) Act (FCRA) licences, reported NDTV. According to Saikiran Appalla, Founder of Scope, the regulatory challenges faced by the company due to this can deter other foreign investors, impacting the overall foreign investment climate in the Indian startup ecosystem.
Government Scrutiny: The Omidyar group's previous scrutiny by the Indian government over alleged unauthorized foreign funding, leading to the barring of Omidyar Network International from funding in 2021, adds a layer of complexity. The regulatory challenges faced by the group…
— saikiran appalla (@saikiranappall) December 12, 2023
STAY ON TOP OF TECH NEWS: Our daily newsletter with the top story of the day from MediaNama, delivered to your inbox before 9 AM. Click here to sign up today!
Also Read:
- What Are The Measures Proposed By India’s Economic Survey To Address ‘Flipping’ In The Start-Up Ecosystem?
- Omidyar Network India Allocates $1 Million To Fund Projects That Can Help In Tackling Coronavirus
- RailYatri Raises Series B Funding From Omidyar Network & Existing Investors
- Newslaundry Secures Funding From Omidyar Network, Mahesh Murthy And Others
