OPIC Launches Venture Capital Program with Financing to India-focused Iron Pillar
New venture capital program to invest in later stage venture funds
supporting developing economies
- Focus on driving venture investments to emerging markets
- Fund will support entrepreneurs and small businesses in tech-enabled sectors including healthcare, education, financial services, agriculture, and energy services
- Emphasis on funds empowering female entrepreneurs and funds with strong potential to achieve growth and impact
SAN FRANCISCO – The Overseas Private Investment Corporation (OPIC) on Wednesday announced the launch of a venture capital initiative designed to support more venture capital investments in emerging markets to help introduce technologies that will address some of the critical challenges facing the developing world.
Iron Pillar, a venture growth investor based in Mumbai and Silicon Valley and specializing in technology businesses in India, is the first fund commitment under this new initiative. Iron Pillar provides growth capital to proven businesses in the enterprise and consumer technology sectors. The fund has begun developing a portfolio of investments in technology businesses that demonstrate potential for making a positive impact on the Indian economy.
OPIC, the U.S. Government’s development finance institution, will invest in venture capital to advance the agency’s longstanding efforts to help entrepreneurs and Series B – D companies achieve scale and attract institutional capital to grow their businesses.
Although emerging markets continue to struggle with longstanding challenges like poverty and hunger, they are also seeing growing consumer and urban populations. Entrepreneurs that introduce innovation can help this progress continue.
Despite this strong growth, gaps remain where equity capital remains too scarce. OPIC helps entrepreneurs overcome some of the key challenges of working in emerging markets, such as an inability to raise capital from local lenders.
OPIC will typically commit between $5 million and $25 million, or up to 25 percent of a fund’s total capitalization. Funds applying for OPIC support will be selected on a quarterly basis through an open and competitive process and eligible funds must comply with OPIC’s standards on human rights, labor rights and U.S. effects.
“Venture capital is an effective tool for identifying promising entrepreneurs both in developed and developing economies,” said David Bohigian, OPIC Executive Vice President. “OPIC has seen small businesses have a big impact in emerging markets and by supporting venture capital funds focused on these markets, we’ll be able to reach more of these promising young businesses.”
“We are delighted to be the first fund selected for OPIC’s new global venture capital program,” said Mohanjit Jolly, Partner at Iron Pillar. “The fast growing Indian market, driven by innovative technology companies, is attracting increasing capital from the U.S. We are excited about the venture growth investment opportunity in India and believe that, together with experienced partners like OPIC, we can catalyze the entrepreneurial energy in the market.”
The launch of the venture capital program comes at a time when venture capital investment in emerging markets is growing. According to Preqin, venture capital investment in emerging markets has risen from $800 million invested across 127 deals in 2009, to $13 billion invested across 1,168 deals in 2017.
The Overseas Private Investment Corporation (OPIC) is a self-sustaining U.S. Government agency that helps American businesses invest in emerging markets. Established in 1971, OPIC provides businesses with the tools to manage the risks associated with foreign direct investment, fosters economic development in emerging market countries, and advances U.S. foreign policy and national security priorities. OPIC helps American businesses gain footholds in new markets, catalyzes new revenues and contributes to jobs and growth opportunities both at home and abroad. OPIC fulfills its mission by providing businesses with financing, political risk insurance, advocacy and by partnering with private equity fund managers.
OPIC services are available to new and expanding businesses planning to invest in more than 160 countries worldwide. Because OPIC charges market-based fees for its products, it operates on a self-sustaining basis at no net cost to taxpayers. All OPIC projects must adhere to best international practices and cannot cause job loss in the United States.