This was the first question that popped up when I heard about Omidyar India’s news. And then I remembered Laura Parkin’s prediction at the Villgro Unconvention 2011. She said “in 10 years I predict that there will be no such thing as social enterprises; they’ll all be enterprises.” The corollary to her prediction was that impact investing would not exist in 10 years.
On Tuesday, Omidyar Network (the most prolific impact investor in India) announced its cessation of operations in India by 2024. It took nearly everyone by surprise.
I say ‘nearly’ because, according to The CapTable, those close to the company) saw this coming.
Yesterday, Omidyar Network India, a longstanding investor in Indian startups, announced it would cease operations in the country. While the news caught many off guard, those close to the firm saw this coming for the past year. 🧵🔽— The CapTable (@thecaptableco) December 13, 2023
Allegations of FCRA violations and insider trading (by its top executive) were ostensibly the triggers.
While ON India stepped up its deal-making activity over the last 5 years, the VC had come under fire for FCRA violations. Its head Roopa Kudva, meanwhile, was named in an insider trading case. These instances didn’t sit well with its parent entity. pic.twitter.com/hUpiP2EZP5— The CapTable (@thecaptableco) December 13, 2023
VC Anmol dug up this interesting list of sunset investments - new media sites from the left to the right, The Ken, and the unambiguous public good ADR (Association for Democratic Reforms). I wrote about ADR on this blog here and here.
Also TIL about the firm's sunsetted portfolio (prior to 2019 when Omidyar Network India separated from the global entity). An interesting combination of investments https://t.co/AFWZRmVLNV pic.twitter.com/TuTswg77Eu— Anmol (@anmolm_) December 12, 2023
When I started ‘watching’ this space 12 years ago, the list of impact investors was a lowly double-digit number (this after including tiny funds and even ‘announcement’ funds). The big fish in that list was Omidyar — investing in enterprises, smaller funds and even NGOs (via grant cheques).
Twitterati Reactions to Omidyar’s Exit
- “Govt must introspect & create policies to facilitate inflow…” Rajesh Sawhney
- Good riddance to bad rubbish from “Snakes in the Ganga” author Rajiv Malhotra
- “Once a billionaire has nothing more left to buy he tries to buy the way the world will be. There is nothing more royally authoritarian than impact funds of billionaires. A rich guy decides, based on his whims, how people should think.” Arnab Ray
- “Even in winding down its India operations, Omidyar Network did what I most respect about it - taking bold decisions few others would. Often unfairly criticised by those who couldn’t understand its nuanced positions, the org’s focus on impact was infectious” Subhashish Bhadra
Apar Gupta (SaveTheInternet, Internet Freedom Foundation) called for a deeper study on ONIs impact on India.
The best summary came from CIS’s Pranesh Prakash:
As Omidyar Network India (ONI) exits India, it leaves a strong legacy of funding and advocacy for digital identity in India despite documented harms of exclusion and surveillance.— Apar (@apar1984) December 12, 2023
At the same time it avoided (in contrast to its position in US and Europe) support for scrutiny of…
The announcement from Omidyar Network that it will exit India in 2024 has prompted a very rare occurrence: it has made bedfellows of both the Indian right and the left, since both sides saw ONI as elites who are undermining Indian democracy. Truly remarkable.— Pranesh Prakash (@pranesh) December 13, 2023
Is Omidyar’s work done?
From their official statement (emphasis is all mine)
Over the last decade, Omidyar Network India has played a critical role in building the impact investment sector, especially focussed on the Next Half Billion. We are proud of our work in this space, which is now attracting larger pools of capital from local venture capital or impact investors and domestic philanthropists than ever before. Having achieved our primary objective of catalysing impact, Omidyar Network India will not be making any further investments in India”
Omidyar has certainly catalysed impact and nobody can disagree with their claim that the space is attracting larger pools of capital. How much though (from local VCs and domestic philanthropists) is a quantitative question and thus fodder for a future post. The corollary to Parkin’s prediction has certainly come true - I don’t believe there are any more “pure play” impact investors.
My use of the “pure play” adjective is also ironical. Take a look at Omidyar Network’s Startups portfolio page and tell me if you can distinguish between social enterprises and ‘regular’ enterprises.
Impact investing is dead. Long live impact investing.