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Omidyar Network and WeWork Inc are intended to leave the Indian market this year under hostile and challenging business conditions, while bookmaker Parimatch is unable to make investments for similar reasons.
According to Business Money, in 2024 Omidyar Network India and WeWork Inc. and a number of major multinational corporations made the strategic decision to withdraw from the Indian market in response to growing government pressure. This move echoes the experiences of other notable entities like Disney, General Motors, Vodafone Group, Parimatch, and BYD, which had initially held optimistic expectations for the Indian economy but later faced a bundle of problems that either compelled them to exit or prevented them from entering the market.
Why Omidyar Network ceases investments
The sudden halt in Omidyar Network India‘s new investments for 2024 was unexpected. Having already poured over $600 million into different startups like e-pharmacy 1MG and Edtech Vedantu, Ebay founder Pierre Omidyar did not provide any explanation for the company’s decision to leave the country.
It has been reported that Omidyar Network India and other foreign companies are facing pressure from the Indian government to prohibit their investments in the country. Meanwhile, some foreign investors, who prefer to remain anonymous, providing their insights on the matter unofficially, highlight the challenges of business operations in India.
This scares away the companies like Parimatch that believe in the prospects of the Indian economy. Parimatch still hopes to overcome these challenges and contribute to the development of the Indian economy.
Startups experience funding drops
The departure of Omidyar Network India reveals a significant decrease in startup funding in India. PrivateCircle Research reports a 62% decline in funding in 2023 to Rs 66,908 crore, down from Rs 180,000 crore in 2022. These figures represent the lowest funding numbers since 2018.
WeWork Inc. leaves India
In April 2024, WeWork Inc. announced its intention to withdraw from the Indian market, divesting its shares in the local division. Following Chapter 11 of the U.S. Bankruptcy Code, the company implemented bankruptcy regulations, despite experiencing a 68% increase in revenue in 2023.
Parimatch expanding activity in India
Parimatch had ambitious plans to invest millions of dollars into the gambling industry in India. However, even before commencing its operations in the market, Parimatch faced some serious challenges due to the deteriorating business environment. One of the major issues encountered by Parimatch was the counterfeiting of its brand. The company responsible for this illegal activity continues to operate in the Indian market, causing reputational damage to the global brand. As a result, Parimatch’s efforts to expand its business have become more complicated. It is important to note that Parimatch is a brand owned by an international holding company that specializes in betting and gambling activities on a global scale.
High taxes compilating gambling business
Last October, the Indian government introduced a 28% Goods and Services Tax (GST) on online gambling, casinos, and horse racing betting. As a result, companies like Super Group and Bet365 had to leave the market.
India a new world’s largest economy?
India declared its ambition to become the world’s third-largest economy by 2027. However, in order to do it, it is imperative to establish a conducive environment for foreign investors like Parimatch. India can enhance its appeal to foreign investors by removing regulatory obstacles and lowering tax rates. This will help boost economic growth in the country. Parimatch is keen on investing in India, but requests the government to ease its restrictions on non-resident companies. Parimatch is known for its social initiatives that empower youth and promote sports. Athletes like Oleksandr Usyk and Denys Berinchyk have partnered with Parimatch on charitable projects, with Usyk serving as the brand ambassador in 2021 to increase visibility and support young athletes.
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