US govt investment arm OPIC wants to bet on late-staged startups in India

Overseas Private Investment Corporation (OPIC), the USA’s government arm of advancing the growth of American businesses by helping them invest in emerging markets, is eyeing Indian late-stage startups as potential investment opportunities.

It is keen on investing in Series B, C, and D rounds of startups instead of Seed or Series A rounds, as the technology risk involved with the latter is something the entity is not interested in taking.

As of now, OPIC, has a portfolio of $3.5 billion invested in private equity, and for financing it commits amounts ranging from $5 million to $25 million or quarter of the fund’s total capitalization, reports Mint.

For the uninitiated, the US government agency offers three products - Financing, Political risk insurance, Investment funds. Via these products, it has created a portfolio of $23 billion across 90 countries.

Out of this, India accounts for investments worth $1.5 billion in overall 40 projects across sectors like financial services, banking and power.

Recently, the corporation had lead the Iron Pillar’s final close of $90 million in the India focused maiden fund. Iron Pillar itself focuses on mid to late-stage startups and invests in Series B, C, or D rounds.

As per David Bohigian, EVP at OPIC, in the interview with the financial daily, India has talented entrepreneurs which can handle the management aspect of the business, and the democracy has a large market for growth, but what these businesses lack is money, and OPIC is looking to bridge that gap.

The startups or projects that receive funding from OPIC will gain credibility in the domestic as well international market, and since being mid to late staged they could also look to expand internationally with OPIC’s backing and insights.

Apart from OPIC, Indian startups have also received investments from various other country's government investment arms including GIC (Singapore) and QIA (Qatar) among others. GIC has made significant investment in Shopclues and has also been lead in a $100 million Series E round.