Omidyar Network’s First 10 Years: An Impact Analysis
Omidyar Network’s First 10 Years: An Impact Analysis highlights our estimates of the impact of the firm’s investments made during our first 10 years, representing investments into 380 organizations and the deployment of $750 million across more than seven sectors and 40 countries. We made most of our investments during that period in early-stage organizations, with capital split roughly 50-50 between for-profit and nonprofit organizations.
To assess impact, we considered:
1) each investee’s direct impact on its own consumers or beneficiaries, by examining reach (the overall number of individuals affected), the significance or depth of the potential impact on those individuals, and the socioeconomic status of those reached;
2) each investee’s sector impact beyond the immediate customer-base, by considering factors such as whether the investee pioneered a new model that spurred imitators, provided industry infrastructure, or prompted governments to introduce policies that would affect the broader marketplace; and
3) Omidyar Network’s level of contribution to each investee, where we considered the significance of our involvement in the subsequent impact.
Several interesting findings emerged as a result of our assessment, such as:
- The organizations in which we invested during this period have touched the lives of more than 1.2 billion individuals around the world; seen in context of the total funding of these organizations, we estimate that our contribution was roughly equivalent to reaching 150 million of those individuals. The services and products provided by our investees touch lives in a variety of ways, from a deep impact such as reliable income to a lighter impact such as providing easier access to information, and we believe this is an important consideration in estimating impact. When we categorized our investments by depth of impact, over half of the individuals reached by our investees (>700 million) have potentially experienced moderate or deep impacts on their lives.
- Taking all aspects of impact into account, about 20% of the investees in our portfolio earned the designation of “Impact Star,” and Impact Stars accounted for 33% of our total capital invested. We define Impact Stars as investees that demonstrated the greatest potential to have had significant direct impact on customers or beneficiaries, as well as significant influence in the broader development of its sector. The 20% figure aligns, in our view, with reasonable expectations for early-stage, high risk investors in the mold of venture capitalists in the for-profit arena, and for venture philanthropists in the nonprofit world. We also found that we invested a larger proportion of our funds into our Impact Stars (33%) than the proportion of investees they represent in our portfolio, which is consistent with a sound impact-oriented investment approach.
Due to the high volume, diversity, and early-stage nature of our investments during the period, combined with limitations on data available, we chose to develop our own methodology to measure impact. We acknowledge that it has limitations, but believe the task was important, and the approach fit-for-purpose.
Omidyar Network continues to evolve, and in the future, each of our initiatives will further develop its approach for impact measurement tailored to its own sector. Nevertheless, we can see several broader themes emerging. For example, initiatives aim to add in more consumer points of view and to better assess what it means to create impact at the sector level.
We undertook this analysis primarily to hold ourselves to account and to learn for the future, but we offer it openly in the interests of transparency and to share our learnings with others in the community. We hope that sharing this report will stimulate conversation among our peers on better ways to measure impact and to ensure it includes the voice of beneficiaries.
Read the full report here.