Fifteen-year-old venture capital fund Accel India today announced that it had closed its sixth India fund to the tune of $550 million. With this new capital, the VC firm will continue placing bets in seed and early-stage startups across India despite the reigning sentiments of a slowdown.
“We look at a 10-year window when investing in startups so we do not just go by the current local market conditions,” Accel partners said.
The firm believes that it has been on the ground for 15 years and has seen a few cycles of slowdown, “so if we have something good, we look at it,” they said.
Started in 2005 in India, Accel is credited with placing some early bets on more than 100 early-stage Indian startups, including Flipkart, Swiggy, and Freshworks. Some of these early bets, which Accel terms as its ‘Originals’, have given the firm happy dividends and a reputation of a ‘kingmaker’ in the Indian startup ecosystem.
“When we started our first fund in India in 2005, the world was a very different place. Just one in 50 Indians had access to the internet and mobile phone ownership was nascent. Yet we firmly believed that India was on the cusp of a big change,” the VC firm notes in its official release.
The firm started with an $800,000 investment in Flipkart and continued backing the company until the startup was acquired by Walmart in an enviable deal worth $16 billion, valuing it at over $21 billion—the largest-ever acquisition of a private, venture-backed company in the world.
Accel invested $1 million in Freshworks in 2011 when the software-as-a-service category from India was almost non-existent. Girish Mathrubootham-led Freshworks is today a global company with more than 2,500 employees and is valued at $3.5 billion.
Similarly, Accel’s seed investment in Swiggy was $1 million when it was making around 100 deliveries a day in Bangalore. Swiggy now handles more than one million daily orders and is valued at $3.4 billion.
The firm notes that it is the first institutional investor in more than 85 percent of all its investments and in addition to the companies above, it is the first partner to founders at category-defining startups such as Acko, Akamara, Blackbuck, BookMyShow, Bounce, BrowserStack, Cogoport, Clevertap, Curefit, Drip Capital, Farcast Biosciences, Moglix, Ninjacart, Portea, Rupeek, Samunnati, StanzaLiving, UrbanClap, USPL, Zenoti, Zetwerk, Zinier and many more.
Interestingly, to a question by YourStory on the investment sentiment on the consumer business, Anand Daniel, Partner at Accel, who has led investments in consumer technology, online marketplaces, mobility, and healthcare, said that the newer set of startups is scaling faster and there is a lot of scope for them to refine their offering.
“It is a changing landscape and very early days in India. There are opportunities across all sectors. We may take these early bets and some may work, some may not.”
Today, India has 600 million internet users and 150 million online transacting customers with a national payments platform that processes $20 billion a month. Anand says, “Swiggy recently announced it is in 500 cities, when we invested in them we could never imagine that.”
Accel has so far raised $1 billion capital across five rounds and has 44 companies with more than $100 million valuation. It typically invests across five areas, including consumer, B2B, SaaS, fintech, and healthcare.
On the way forward, the firm believes that it sees the trend of digital adoption play out not only in categories like food delivery, digital payments, and e-commerce, 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 disproportionately higher value,” the release notes.
To another question on how the nine partners come to a decision about investing in a particular company, they said each one has the flexibility to make their decisions and it helps to have a diverse thought process.
“So when we invest in a startup, it becomes an Accel company as opposed to a single partner’s portfolio,” the partners said. With its founder-first approach, Accel supports its startups in product and scale thinking, brand and digital marketing, organisational scaling and culture, and financial metrics.
Accel was founded in Silicon Valley over 35 years ago. "We believe bold, exceptional entrepreneurs—people we refer to as “Originals”— are not confined to geographies, they come from everywhere. It is the reason we have a presence in India for over 15 years and in Europe for nearly two decades," the press note stated.
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