Omidyar Network and WeWork Inc will leave India this year due to unfavorable business conditions, and bookmaker Parimatch cannot invest in the country for these reasons
Business Money notes that in 2024, several large international companies, including the investment fund Omidyar Network India and the American company WeWork Inc., decided to leave the Indian market due to growing pressure from the government. These companies repeat the fate of Disney, General Motors, Vodafone Group, Parimatch and BYD, which had high hopes for the Indian economy, but for various reasons were forced to leave the market or could not enter it.
Why is Omidyar Network stopping investments?
The announcement of the immediate cessation of Omidyar Network India’s new investments in 2024 came as a surprise to many. The company has previously invested more than $600 million in various startups, including e-pharmacy 1MG and Edtech Vedantu. However, Ebay founder Pierre Omidyar did not give a clear explanation for the decision.
Some sources claim that Omidyar Network India and other companies have come under pressure from the Indian government to ban them from investing in the country. Other foreign investors may comment only “off the record” on the situation, highlighting the complexities of working in India.
This poses additional challenges for companies like Parimatch that believe in the prospects of the Indian economy. Parimatch continues to look for ways to overcome these challenges, striving to contribute to the development of the market.
Funding for start-ups drops
The exit of Omidyar Network India coincided with a sharp drop in funding for startups in India. According to PrivateCircle Research, funding fell by 62% in 2023 to Rs 66,908 crore, up from Rs 180,000 crore in 2022. These are the lowest funding figures since 2018.
Exit of WeWork Inc.
In April 2024, WeWork Inc. announced its plans to exit the Indian market, selling all of its shares in the local division. The company has enforced bankruptcy laws under Chapter 11 of the U.S. Bankruptcy Code, although its revenue grew by 68% in 2023.
Problems of Parimatch bookmaker in India
Parimatch, a well-known bookmaker, hoped to invest millions of dollars in the Indian economy. However, even before the start of its activities in the market, Parimatch encounted serious problems related to the deteriorating business climate in India. In particular, Parimatch has found counterfeiting of its brand. The company that counterfeits the brand is still operating illegally in the Indian market, creating image problems for the international brand. This has complicated Parimatch’s plans to expand its business. Parimatch is a brand of an international holding that is engaged in betting activities and organizes gambling in different countries around the world.
High Taxes as a Barrier to the Gambling Business
In October last year, the Indian government imposed a 28% GST on online gambling, casinos, and horse racing betting. This has led to the exit of companies such as Super Group and Bet365 from the market.
How can India become the world’s third largest economy?
India aims to become the world’s third-largest economy by 2027. Yet, to achieve this goal, it is necessary to create a favorable environment for foreign investors such as Parimatch. Addressing the regulatory environment and lowering tax rates can help attract more foreign investment, contributing to the country’s economic growth.
Parimatch is keen to invest in India if the government’s pressure on non-resident companies eases. Parimatch is known for its social projects aimed at supporting young people and sports. Famous athletes such as Oleksandr Usyk and Denys Berinchyk have collaborated with Parimatch in various charity events. Usyk, in particular, was the ambassador of Parimatch in 2021, helping to popularize the brand and support young people in sports.
