In light of challenging business conditions, Omidyar Network India and WeWork Inc. have announced their withdrawal from India in 2024. Additionally, Parimatch has faced obstacles in pursuing investments in the country due to similar circumstances.
As Business Money notes, this choice repeats a pattern seen among many international corporations like Disney, General Motors, Vodafone Group, Parimatch, and BYD, which were initially positive about the Indian economy but later had to leave or failed to establish a foothold in the Indian market.
What was the reason behind Omidyar Network’s decision to cease making investments?
Omidyar Network India’s unexpected declaration to halt new investments in 2024 has left many industry experts stunned. Having poured over $600 million into Indian startups such as e-pharmacy 1MG and edtech Vedantu, the reasoning behind Pierre Omidyar’s decision, the founder of Ebay, remains uclear.
Like Omidyar Network India, various other firms are said to be facing pressure from the Indian government, leading them to suspend their investments in the country. Some international investors are hesitant to publicly address this issue, highlighting the complexities of conducting business in India. This presents further challenges for companies such as Parimatch, who maintain a favorable perspective on the Indian economy’s potential. Nevertheless, Parimatch is actively exploring strategies to overcome these obstacles and contribute to the growth of the market.
Startups losing their funding
The departure of Omidyar Network India coincided with a decline in financial backing for Indian startups. PrivateCircle‘s research reveals a substantial 62% decrease in funding in 2023, totaling Rs 66,908 crore, compared to the previous year’s Rs 180,000 crore. These figures highlight the lowest levels of funding observed since 2018.
WeWork Inc. Leaving India
In April 2024, WeWork Inc. expressed its intention to withdraw from the Indian market by divesting all its shares in the local sector. Despite experiencing a significant 68% increase in revenue in 2023, the company has initiated bankruptcy proceedings under Chapter 11 of the U.S. Bankruptcy Code.
Parimatch facing troubles in India
Another global company, Parimatch, which is a renowned bookmaker, expressed confidence in its decision to inject millions of dollars into the Indian economy. Nevertheless, prior to launching its operations in the country, Parimatch encountered significant challenges stemming from the unfavorable business environment in India. A key obstacle faced by Parimatch was the unauthorized replication of its brand. Notably, the entity responsible for this continues to function within the Indian market, causing substantial harm to the global brand’s image. As a result, Parimatch’s efforts to expand its presence in India have become more complex. It is important to note that Parimatch is a brand under the ownership of an international holding company specializing in betting and gaming establishments worldwide.
Increased Taxes for Gambling Business
Last October, the Indian government implemented a 28% Goods and Services Tax (GST) on online gambling, casinos, and horse racing betting. As a result, companies like Super Group and Bet365 decided to withdraw from the market.
India as the world’s third largest economy?
India is striving to solidify its status as the world’s third-largest economy by 2027. However, in order to achieve this objective, it is imperative to establish a conducive environment for foreign investors like Parimatch. Through addressing regulatory challenges and reducing tax burdens, India can attract more foreign investments.
Parimatch is interested in investing in India, contingent upon the government easing its limitations on foreign businesses. It is important to highlight that Parimatch is recognized for its charitable projects focused on supporting youth development and promoting sports. Renowned athletes such as Oleksandr Usyk and Denys Berinchyk have collaborated with Parimatch on various philanthropic projects. Throughout 2021, Usyk served as Parimatch’s ambassador, effectively enhancing the brand’s visibility and supporting young athletes.
