The Overseas Private Investment Corporation Oct. 24 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, the corporation said in a news release.
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, it said.
“We are delighted to be the first fund selected for OPIC’s new global venture capital program,” said Mohanjit Jolly, Indian American 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,” Jolly, who has an MBA from the UCLA Anderson School of Management, added.
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 through D companies achieve scale and attract institutional capital to grow their businesses, according to the release.
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, it said.
Despite this strong growth, gaps remain where equity capital remains too scarce, it noted.
OPIC helps entrepreneurs overcome some of the key challenges of working in emerging markets, such as an inability to raise capital from local lenders, the firm said.
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, it added.