Omidyar Network India launches initiative to fund companies focussed on MSMEs, migrant workers

MUMBAI: Omidyar Network India, a philanthropic investment firm, has decided to invest millions of dollars in social enterprises focussed on MSMEs and migrant workers to create a portfolio of ‘lighthouse investments’ that will work towards alleviating problems faced by two of the hardest hit segments of the Indian economy due to the on-going Covid-19 pandemic.

The investments under the firm’s ‘ReSolve’ initiative would range between $500,000 to $2 million. The firm is also open to investing larger sums, from its annual envelope of $50-55 million, depending on the quality of proposals.

“We have committed to investing $300-350 million in the next five years in India. That means, on an annual basis, we can invest $50-55 million. And depending on the ideas and proposals we get, I don’t think money is a problem. We can set aside a significant portion of our planned investments in India for this initiative,” said Roopa Kudva, MD, Omidyar Network India.

After studying the economic damage the pandemic has inflicted on MSMEs and migrant workers, the firm has decided to run the initiative for 12 to 24 months to create meaningful on-ground impact.

“These two segments — MSMEs and migrant workers— contribute to our GDP and employment in a significant way and currently are under a lot of stress as a result of the pandemic. Our attempt is to address long-standing issues in these segments. We will work in collaboration with founders, policymakers and think tanks to experiment with new solutions in both these segments,” said Kudva.

A key aspect of the investments will be selectively seeding new solutions or institutions and supporting companies and projects that will have a ‘demonstration effect’.

The opportunities landscape that the firm is targeting include NGOs creating unique solutions, companies delivering innovative tech-led services, firms developing marquee surveys and databases and businesses involved in scaling up market ecosystems.

“We are looking at approaches which are slightly distinctive, offer new cutting points, where you need to take a high level of risk. We are ready to step forward. These are indicative ideas, we will also have to see what is on the minds of the entrepreneurs,” said Kudva.

SMEs in India are reeling in the economic slump induced by the Covid-19 outbreak and the sudden loss of demand and revenue has severely affected their ability to function, and caused liquidity shortages.

Hence, the firm has decided to invest in ventures that operate in high-impact areas like providing credit funding, building digital infrastructure and creating awareness about MSME issues.

Incubating pilot projects at a cluster or state level, to seed system-level innovations, is also high on agenda.

“We have identified the areas where large gaps exist. These areas play a little bit on our own core expertise and strength and also have a technology focus. It’s our sweet spot,” added Kudva.

As part of its program to create solutions that help alleviate migrant worker problems, the firm is looking to fund companies that operate in public information dissemination, ethical employment practices, worker welfare and migrant housing.

“We are looking at projects that can be replicated across the country and scaled up in a robust way,” said Kudva. Recently, Omidyar Network India announced that it has fully utilised the capital pool of Rs. 10.75 crore under its ‘Rapid Response Funding Initiative’ for Covid-19.

The initiative was launched on March 24, 2020 and the firms received 2,000 applications out of which 67 proposals were approved across 17 states. “The response to the initiative was overwhelming and beyond our expectations. The NGOs were really able to provide effective, low cost solutions quickly. The initiative provided direct relief to over 3 million people and education efforts impacted about 48 million people,” said Kudva.

Omidyar has invested between $ 310-320 million in India till now, 70 per cent of which are in equity investments and the remaining in grants.

Omidyar Network India launches initiative to fund companies focussed on MSMEs, migrant workers Omidyar Network India launches initiative to fund companies focussed on MSMEs, migrant workers Reviewed by TechCO on 7/23/2020 Rating: 5

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