The “Dual chequebook” in action: How our equity investments and grants complement each other in social impact

By Roopa Kudva.

At Omidyar Network India, we deploy capital flexibly to create positive social change – making both equity investments in early-stage enterprises and providing grants to non-profit organisations. We call this our “dual chequebook” approach. The dual chequebook is a vital part of our toolkit. It enables optimal allocation of capital as we seek to activate multiple pathways to impact and also amplify impact at the sector level. The examples below demonstrate the dual chequebook in action — how equity investments and grants are complementary and mutually reinforcing in effecting social impact.

Driving sector change

A mix of equity investments and grants enables us to support change at three levels – innovative entrepreneurs, sector-level infrastructure and policy reforms – thereby helping drive sector change. For example, our work in the education sector aims at increasing access to education and improvement in learning outcomes through a multi-pronged approach. Towards this end, we are investors in ed-tech innovators like Doubtnut and Vedantu, both of whom help students learn better. Teach for India, a non-profit seeks to improve the quality of human capital — teachers and leaders — in the education sector. And another for-profit investee, Varthana, provides loans to affordable private schools that helps them expand and upgrade their infrastructure. The Education Alliance is a non-profit working with state governments to encourage public-private collaboration in school systems.

Developing entrepreneurs in underserved areas

Several vital areas in India face a dearth of entrepreneurial talent and solutions, for example, civic tech, property rights and the legal ecosystem. Using grant funding, we supported Village Capital in conducting an accelerator programme for civic technology start-ups. Consequently, new “for-profit” entrepreneurs could showcase novel ideas to a wider audience, attracting funding, building partnerships with players in adjacent areas, and helping raise the profile and understanding of the civic tech space. Similarly, a grant to N/Core is helping incubate new entrepreneurs in the property rights space. Grants are an effective tool in catalyzing new sectors that are important for societal health and well-being.

Promoting “good tech”

As tech-led investors we believe in the power of tech, in particular the mobile phone to drive impact at scale in ways that were not possible earlier. Our “tech for good” approach has resulted in equity investments in ~50 tech-led start-ups who are enabling access to aspirational services and providing opportunities for employment and productivity to previously under-served populations.

At the same time, we recognize that tech has increased the vulnerability of individuals and society to harms. We therefore fund initiatives in “responsible tech” – helping governments, businesses and consumers implement policies, practices and behaviours that promote data security, privacy, consent, user control and recourse in the case of harms. We recently funded an initiative by Monitor-Deloitte to develop handbooks on data practices, privacy and governance for entrepreneurs, investors and policy makers. Similarly, our grant funding enables Arrka to conduct data privacy workshops and clinics for entrepreneurs, helping them assess their privacy practices and strengthen them where needed.

Supporting research to inform entrepreneurs and policymakers

Grants enable us to support research projects that help entrepreneurs understand middle and low-income customers better or increase awareness amongst current and prospective entrepreneurs about market opportunities. Quality research can also help support policymakers and regulators. The research we fund is typically made public, for the benefit of all, with a full disclosure that we fund it.  Research on regulatory sandboxes was an input for the RBI’s technical committee on household finance. Similarly, the State of Aadhaar report 2019, a survey of ~170,000 households provided insights on the unfinished agenda for Aadhaar. The “Currency of Trust” report by Dalberg helped improve the understanding of the barriers that low income customers face in accessing and using financial services. And the report “Credit Disrupted” by Boston Consulting Group, focused on opportunities for digital lending to small businesses; we hope it will draw many more innovative entrepreneurs into this space.  

Designing creative solutions

Anudip Foundation (Anudip) is one of our earliest investees. Anudip is a non-profit that works with underprivileged youth, skilling them to participate in the digital and technological economy. In its early years, as an adjunct activity, the foundation was deploying 50-60 of its trainees to work on commercial projects. The revenue generated from these projects augmented the operational funds of the foundation. Recognizing the potential to scale up this activity as a standalone business, this centre, termed the ‘Merit Centre’ was carved out as a separate “for-profit” company. Omidyar Network became the first equity investor in iMerit, even as we continued supporting Anudip with grant funding. Today, iMerit works in computer vision, natural language processing, and content and customer services while continuing to hire from the same backgrounds that Anudip set out to serve. It has scaled significantly, employing around 3000 people from disadvantaged communities, 50% of whom are women, and has top global companies in the areas of financial information services, autonomous vehicles and medical AI as customers. Anudip too has continued to grow, augmenting its funding base and has trained over 100,000 young people till date. This is a notable and inspiring example of what a dual chequebook model, used thoughtfully and creatively, can achieve.