Accel India's investment team
Palo Alto-headquartered venture capital firm Accel has closed its sixth India fund at $550 million, its largest ever, to invest in early stage startups. With the latest fund, Accel India now manages a corpus of approximately $1.5 billion.
Accel has been a prolific early stage investor in Silicon Valley, where it has backed the likes of Facebook, Slack, Dropbox and Spotify to name to a few.
The firm entered India in 2008 by buying homegrown venture fund Erasmic, led by Subrata Mitra, Prashanth Prakash and Mahendran Balachandran. The trio became partners at Accel India. The firm has since expanded its partnership to nine members, adding Anand Daniel, Shekhar Kirani, Dinesh Katiyar, Prayank Swaroop, Abhinav Chaturvedi and Barath Shankar Subramanian.
Accel has tasted phenomenal success in India with early stage investing. Some of its early investments include Mu Sigma, Myntra and Flipkart. The firm was the first institutional investor in Flipkart and is estimated to have netted about a billion dollars against a total investment of $124 million.
Similarly, Accel invested in the seed rounds of Freshworks and Swiggy, which are currently valued north of $3 billion, as well as UrbanClap and Blackbuck, which currently command close to a billion dollars in valuation. Accel claims to be the first institutional investor in about 85 percent of its portfolio.
The ploy has worked. As many as 44 of its portfolio companies command more than $100 million in valuation.
“Seed and early stage investment is integral to us. Being early or the first investor and co-evolving with the entrepreneurs have given us the momentum,” said Prakash.
Over the past decade, Accel has largely invested in consumer, business to business, software as a service (SaaS), financial technology and healthcare startups. While the firm will continue to invest in these verticals, it has also started exploring social commerce, mobility, curated marketplaces etc.
“With a robust digital infrastructure firmly in place—and expanding rapidly—we expect digital adoption in India only to accelerate. We see this trend playing out not only in categories like food delivery, digital payments and ecommerce, but also across sectors like agritech, education, insurance, logistics, healthcare, real estate and manufacturing. In the last decade, Indian tech startups have created around $100 billion of enterprise value and as the GDP doubles in the next decade, we see startups creating a disproportionately higher value,” Accel said in a statement.
The firm has been consistently increasing its fund size to equip itself to participate in follow-on rounds. It had closed the fifth fund at $450 million, while the fourth had closed at $325 million.