Overseas Private Investment Corporation (OPIC), a self-sustaining development finance institution of the US government, is looking to invest in late-stage Indian startups.
David Bohigian, executive vice-president at OPIC, said, “In VC (venture capital), we are looking at late-stage firms, that is Series B, C and D. What we have decided not to do is get into early-stage venture capital, and not take the technology risk.”
The news comes soon after the institution helped Indian venture capital firm Iron Pillar close its maiden fund at ₹660 crores ($90 million).
OPIC has a $23 billion portfolio, ranging from political risk insurance, project finance, and private equity, across 90 countries. It’s private equity portfolio of $3.5 billion, a business it has decades of experience managing. It commits between $5 million to $25 million, or up to a quarter of a fund’s capitalisation.
The financial institution is more interested in making impact investments across the startup ecosystem.
It has around 40 projects with a total investment pegged at $1.5 billion across sectors like power, banking, and financial services, in India.
According to Bohigian, Indian startup ecosystem is full of management talent and a large market, while there has been a disconnect in attracting capital.
“There are three key elements to any successful business plan—money, markets and management. Clearly, to have the capital to scale a business is important, and that has been a missing element in the Indian venture capital markets. India’s entrepreneurs are among the most talented in the world and we think they will be able to overcome challenges across operations, marketing, technology,” he said.
Talking about making impact investment, Bohigian, said, “In India, for example, if we can help the solar power industry to make India more energy independent. It’s less about the dollars and rupees and more about the impact.”
Indian startup ecosystem has bright days ahead, as the investment-starved ecosystem is now attracting capital from all around the globe. This comes to show the confidence the world has in the Indian startup ecosystem and its ability to scale.
Earlier this month, Omidyar Network said it was looking to invest around $250 million in Indian startups, over the next four-five years. Also, Alteria Capital marked the second close of its maiden fund at ₹625 crores and Blume Ventures marked the first close of its third fund at ₹295 crores, targetting ₹590 crores.