 "Our two-cheque book model is unique: Roopa Kudva")
In July this year, Roopa Kudva took charge of the India operations of the Silicon Valley-based impact investment firm Omidyar Network, as partner and managing director, after 23 years with CRISIL. In an interaction with Sudipto Dey, she talks about the fund's direction. Edited excerpts:
How challenging has been the move from CRISIL to Omidyar?
Better than I expected. I arrived at Omidyar when the environment for start-ups has never been as positive as now. This year, 1,200 IIT students, 10 per cent of the batch, are joining start-ups. So, the best minds are going these.
The key drivers of impact investment are gathering momentum in India. One is rapid penetration of smartphones. India has 300 million internet users, 200 million smartphones today - growing at 20 per cent quarter-on-quarter. Around 130 million people access the internet for the first time on their mobile and in the local language. We have digital identity with Aadhaar, we created 170 million bank accounts in six months, the concept of land pooling in new Andhra capital. All these trends - mobile penetration, digital identity, new bank accounts, property rights through land pooling - are coming together to drive impact. We are seeing a pipeline of new deals.
Has there been a shift in India strategy for investment?
Omidyar did a strategy re-visit in the beginning of this year. That was before I joined the organisation. We have organised ourselves into five major initiatives - financial inclusion, education, consumer internet and mobile, property rights, and governance and citizen engagements. Our strategy is to identify key drivers of change in each of these segments. Our investments would be clustered around those themes that will drive change. In each of the verticals, we will focus on investments at the policy level, at the level of sector infrastructure, and at the level of individual innovation.
Are you now open to investing in start-ups at an early seed level?
We have always been early-stage investors, and have typically come as Series-A. However we did see a situation where valuations were getting frothy. So, we decided to look at getting into deals at an earlier stage, maybe with smaller cheque sizes. We have now selectively started doing seed deals. As a firm, we have the ability to take very early-stage risk, and higher risks. Zimmber is an example of seed-round investment. We want to direct our grant money, the not-for-profit dollars, at the bottom of the pyramid (projects), while targeting the for-profit investments at the aspiring and middle class. The grant money also goes to areas of public good.
How do you see the portfolio evolving?
We have committed $160 million to India (over the past five years), with active portfolio of around 40 organisations. The portfolio will evolve to reflect some of the trends we are seeing. We can expect to see more educational technology firms. The increasing consumption of video (on mobile) becomes a powerful tool for education, be it in the skills area or in the classroom. We expect to see more alternate assessment type of companies, which use data and analytics to arrive at credit decisions for the poor and the under-served. We can expect to see platforms emerging to provide a range of services to the lower middle classes. A lot of companies are looking at data analysis of budget information and fiscal information of the government. I expect to see a lot more in the portfolio that leverages local languages. Our two-cheque book model, one for-profit and one not-for-profit, is unique and will continue.
There is a huge opportunity to leverage the learning from our portfolio across the world. I see us providing greater human capital to our portfolio. We can help them build a leadership pipeline, work with chief executive officer to meet the development needs of senior leadership in the organisation or training and development of the team.
CLARIFICATION
An earlier version of this article misstated Roopa Kudva's last name as Kudwa.