The Covid-19 pandemic and its wider economic impact are an unprecedented development. As an investment and grant-making firm, we wanted to share our thoughts on supporting our investees and grantees – our goal is to be a caring, engaged and supportive investor through this difficult time.
Our purpose as Omidyar Network India (ONI) is to support entrepreneurs in the private, public and non-profit sectors who help create a meaningful life for every Indian. We do this through both early-stage equity investments and grants.
As a first step, we moved quickly to focus on the health, safety and well-being of our own team, and the continuity of our operations This is analogous to the “oxygen mask” procedure on airplanes – first secure your own mask and then help others. Securing our own team and operations enabled us to significantly step up our responsiveness to our investees. For now, our offices in Mumbai and Bengaluru are operating on remote-work protocols. Staff are encouraged to avoid public gatherings, groups and non-essential work travel. At the same time we recognise that we are exceedingly fortunate to be able to easily change over to remote working without the complexities that others face – customer support teams, field sales forces, need to maintain even skeletal “onsite” operations, etc. We are fully prepared to support our investees through this period, including virtual meetings, continuing with our Investment Committee meetings and diligence calls as scheduled, standing by the commitments we have made, making wire transfers for our funding, etc.
Investee check-ins on health and business continuity planning: The first priority of our investment and grant leads was to have check-in conversations with all the organisations we support to be thought-partners in prioritising the health and safety of their teams and their business continuity planning. By now, our investment leads have had conversations with nearly 70 organisations we have funded, and we have a good sense of their level of preparedness. As can be expected, these organisations are at different levels of preparedness on work-from-home and other measures to protect employee health. We have seen that moving engineering and product teams to work-from-home has generally been the easiest. The most planning is required in organisations with feet-on-street teams (sales or delivery) and grassroot non-profit organisations working with communities in a “high-touch model”. Encouragingly, the last two days have seen most organisations making substantial progress.
Managing the core business/activity: The next step is to start thinking about the implications of a prolonged pandemic duration, the consequent major economic slowdown and the impact on our investees and grantees. Regardless of the fact that we don’t have a precise idea of how long it will take for Covid-19 to run its course and the exact economic consequences, it is clear that across the board, the economic shock will be prolonged and deep.
In the case of for-profit organisations, our guidance to navigate the current environment is to:
1. Conserve cash: cash is king.
2. Revisit the business plan and all assumptions.
3. Moderate expectations on timelines for fundraising and valuations.
4. Step up communications with customers, particularly if you are expecting disruptions in service/product.
5. Communicate with your team on your thinking on the business strategy even as you ‘keep their health and safety during Covid-19 a priority.’
6. Strengthen your board or advisors with people who have managed businesses through multiple cycles.
7. Watch out for concentrations: by customers, vendors, geographies, etc. The Yes Bank episode shows the importance of diversification even in bank accounts and Unified Payment Interface (UPI) partners.
For more, refer to this blog.
Our investment teams are actively engaging with entrepreneurs in thinking through these issues. For some, such as those in the education-tech and health spaces, new opportunities are emerging, as this crisis will also mean a major reset for the world in many ways.
Many of the principles above are applicable to non-profits as well. Additionally, where our grants have funded specific projects that envisage field work and convenings in the next 3-6 months, we recognise that these may not proceed as planned, and encourage you to discuss the options and revised plans with your investment lead at ONI. We have also funded several think tanks and research organisations working on key long-term issues, like property rights, privacy and data protection, which require deep engagement with the government. We will shortly begin virtual brainstorming roundtables with groups of think tanks and research organisations about creative approaches to maintain the long-term momentum in these vital areas. Stay tuned for our announcements on this.
Collaborations with co-investors and donors: In the coming days, we will also embark upon a series of interactions with other investors and grant-making organisations to share learnings and best practices, and assess if there are co-ordinated initiatives that we as funders can take in this special situation.
Call for rapid response proposals: Finally, we recognise that the slowdown will most impact the vulnerable sections of our population and large swathes of India’s “next half billion”, whom we seek to serve – the vendors, gig-economy workers, small businesses and daily wage earners. We are open to rapid response proposals for funding initiatives that entail innovative tech-led solutions to address the issues faced by the next half billion in managing and mitigating the challenges that come with Covid-19. We will announce further details shortly. We encourage you to share with us your proposals in these areas. Please send your proposals, not exceeding one page, to [email protected] with the subject line “Next Half Billion – Covid19 related proposal”.
The entrepreneurs we work with provide us our inspiration and purpose. You are the reason we come to work every day. We want to thank you for all that you are doing and assure you of our partnership through these challenging times.