In 2024, Omidyar Network India and WeWork Inc. announced their exit from the Indian market citing difficult business conditions. Similarly, Parimatch has faced significant obstacles when attempting to invest in India for comparable reasons.
Business Money highlights that this decision is part of a wider trend involving global corporations such as Disney, General Motors, Vodafone Group, Parimatch, and BYD, which initially held positive expectations about the Indian economy but ultimately withdrew or failed to establish a lasting presence.
Why Did Omidyar Network Halt Investments?
Omidyar Network India’s unexpected announcement to stop new investments in 2024 surprised many industry experts. Having invested over $600 million in Indian startups like e-pharmacy 1MG and edtech platform Vedantu, the company’s founder Pierre Omidyar did not provide a detailed explanation. Reports suggest that increasing pressure from the Indian government compelled Omidyar Network and other firms to cease their investments. Many foreign investors prefer to comment only off the record, underscoring the challenges of doing business in India.
For companies like Parimatch, which remain optimistic about India’s potential, these pressures present additional hurdles. Despite this, Parimatch actively seeks solutions to overcome these challenges and contribute to market growth.
Decline in Startup Funding
Omidyar Network’s departure coincides with a sharp decline in funding for Indian startups. According to PrivateCircle Research, startup funding fell by 62% in 2023 to Rs 66,908 crore from Rs 180,000 crore in 2022—the lowest level since 2018.
WeWork’s Exit from India
In April 2024, WeWork Inc. revealed plans to exit the Indian market by selling its entire stake in the local business. Despite a 68% revenue increase in 2023, WeWork has filed for bankruptcy under Chapter 11 of the U.S. Bankruptcy Code.
Challenges Faced by Parimatch in India
Parimatch, a renowned international bookmaker, planned to invest millions in India but faced significant challenges even before starting operations. A major issue has been widespread brand counterfeiting. The counterfeiters continue to operate illegally within India, damaging Parimatch’s global reputation. These complications have made Parimatch’s expansion efforts more difficult. Parimatch is part of an international holding company specializing in betting and gambling operations across several countries.
High Taxes Burdening the Gambling Sector
In October last year, India imposed a 28% Goods and Services Tax (GST) on online gambling, casinos, and horse racing betting. This steep tax burden led companies such as Super Group and Bet365 to exit the market.
India’s Goal to Become the World’s Third-Largest Economy
India aims to be the world’s third-largest economy by 2027. To realize this ambition, it is crucial to create a favorable environment for foreign investors like Parimatch. Reducing regulatory barriers and tax rates would attract greater foreign investment, fueling economic growth.
Parimatch has expressed strong interest in investing in India if government restrictions on foreign companies are eased. Beyond business, Parimatch is well known for its social initiatives aimed at youth empowerment and sports promotion. Famous athletes such as Oleksandr Usyk and Denys Berinchyk have actively partnered with Parimatch on charitable projects. In 2021, Usyk served as Parimatch’s ambassador, significantly boosting brand visibility and supporting the development of young athletes.
