Omidyar Network, the impact investing firm backed by eBay founder Pierre Omidyar, has announced the closure of its India operations, effective at the end of the year. This decision comes as a surprise to many, as the firm has been active in the Indian market for 13 years, investing in nearly 75 startups. The official reason cited by Omidyar Network for its exit is the "significant change in context and the growth in the economic landscape" of India. The firm claims that its initial goal of "catalyzing impact" in India has been achieved and that the country now has a vibrant startup ecosystem with ample domestic capital available. However, some industry insiders are skeptical of this explanation. They point out that Omidyar Network India had recently made five new investments in the country, and its executives were actively participating in industry events just days before the announcement of its closure. One possible reason for the shutdown could be the recent struggles of some of Omidyar Network's portfolio companies in India. Doubtnut, a startup that raised over $50 million, was recently sold for a fraction of its value. Additionally, ZestMoney, once valued at nearly $450 million, also announced its closure this year. These events may have led Omidyar Network to question the viability of its India strategy. Another factor that could have influenced the decision is the changing dynamics of the Indian venture capital landscape. Tiger Global, a major investor in India, recently admitted that the country has historically delivered below-average returns for investors. This suggests that it may be becoming more difficult to generate attractive returns in the Indian market. Despite the closure of its India operations, Omidyar Network remains committed to its impact investing mission globally. The firm will continue to support its existing portfolio companies in India and will assess how best to manage them going forward. This development marks the end of an era for Omidyar Network in India. The firm played a significant role in supporting and nurturing the country's startup ecosystem. However, the changing market dynamics and recent challenges faced by some of its portfolio companies may have ultimately led to its decision to exit the market.
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