Investor Profile:
Omidyar Network
The Pioneering Investment Organization of eBay Founder, Pierre Omidyar

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“We believe that microfinance is a financially scalable and sustainable model that can provide both attractive returns for investors, as well as significant social impact through the positive impact on the lives of clients it reaches.”

-- Jim Bunch
Director, Investments, Omidyar Network

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When Pierre Omidyar launched eBay in September of 1995, he was greatly influenced by his beliefs in the inherent potential of all people and the transformative power of markets. Starting from the premise that people are basically good, Pierre created a platform that enabled people to connect over shared interests and build individual businesses. Today, eBay enables more than 80 million buyers and sellers worldwide to connect and prosper.

Pierre’s experience at eBay led him to launch Omidyar Network, a philanthropic investment firm that creates opportunity for people to improve their lives by investing in market-based efforts that catalyze economic, social and political change. Like eBay, Omidyar Network harnesses the power of markets to enable people to tap their potential. By supporting innovative, market-based approaches, Omidyar Network creates opportunity for individuals to connect with others, discover their power to make a difference in the world, and truly improve their lives.

Unlike foundations, which typically make grants, Omidyar Network is uniquely structured to invest in both non-profit for-profit efforts. Since its founding 2004, Omidyar Network has created a diverse, multi-sector portfolio of investments.

One of Omidyar Network’s two key initiatives is Access to Capital, which funds initiatives that provide opportunity for poor people through economic empowerment. Microfinance is a cornerstone of Omidyar Network’s strategy to provide individuals around the world with access to capital. By investing broadly in microfinance, the organization aims to support and expand the sector’s growth and extend microfinance services to people who need them. At the same time, it aims to demonstrate that microfinance institutions can be financially as well as socially profitable.

In December 2004, Omidyar Network invested $1 million into MicroVest One, LP (MV 1). MicroVest’s role in strengthening the microfinance sector and closing the funding gap for microfinance institutions makes it a well-aligned strategic investment.

MicroVest acts as a vehicle, bringing private capital from the North American market to MFIs in the developing world. However, MicroVest (MV) relies on investors like Omidyar Network to mobilize capital.

Omidyar Network knows that expanding the microfinance industry within the framework of traditional financing options, i.e. subsidized grants and donations, is difficult, because these sources do not sufficiently meet demand. Consequently, MicroVest’s efforts to scale the microfinance industry made this investment a perfect fit for Omidyar Network. MicroVest works within the framework of existing capital markets. As a virtually untapped source of funding, capital markets could provide significant growth potential for the microfinance industry.

Omidyar Network also strives to promote microfinance as a mainstream investment, which requires a set of standards not yet firmly established in the microfinance industry. MicroVest is working in that direction. MicroVest performs thorough due diligence on par with all commercial investments. MFIs receiving MicroVest One, LP funding are held to high expectations regarding efficiency and performance.

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