Omidyar Network, the philanthropic investing firm of billionaire eBay founder, Pierre Omidyar and his wife Pam, plans to invest over $350 million (Rs.2,333 crore) in for-profit ventures and non-profit organisations in India by 2020.
Roopa Kudva, partner at Omidyar said the Silicon Valley-based firm had already invested about $160 million (Rs.1,067 crore) in the country.
Omidyar invests in areas such as consumer internet and mobile, entrepreneurship, financial inclusion, governance and citizen engagement, and property rights. In India, it has invested in ventures such as employability assessment firm Aspiring Minds, train travel tech startup RailYatri.in and online classifieds portal Quikr.
On Thursday, it also released a report about how frontier capital, or early stage risk capital in emerging markets, can be an effective tool for investors to achieve financial returns and social impact.
The frontier capital opportunity focuses on companies developing products and services for people who earn roughly $2 (Rs. 133) to $8 (Rs. 533) a day.
“Frontier capital sits at the convergence of venture capital and impact investing,” said Matt Bannick, Managing Partner at Omidyar Network. “By studying entrepreneurs who are targeting low and lower middle income populations, this report identifies a major market opportunity that can also improve the lives of hundreds of millions of people.”
This population fall between the very bottom of the economic pyramid — where many impact investors currently focus — and the existing middle class. This means they have greater purchasing power and a steadier income, but still greatly benefit from products and services that improve their lives. The purchasing power of the low and lower-middle-income populations in South Asia is estimated at $483 billion, according to Omidyar.
“Our experience after eleven years in impact investing in emerging markets is that one can get strong returns and make a tremendous difference in people’s lives by focusing on the low and lower-middle income populations,” said Ms. Kudva, said. “There are a range of investing strategies investors can explore directed at those earning between $2 and $8 per day as they make impact investing a truly viable part of their portfolios.”
