Accel is one of the most influential venture capital firms on the planet. Now, the firm is focusing on India. It mainly focuses on early-stage investments. Today, a firm spokesperson said that they closed $550 million for its venture fund in India.
It is a large amount of capital for the VC firm Accel’s efforts in India. It began investing in the country around 15 years ago and invested around $1 billion through various funds.
Anand Daniel, who is a partner of Accel in India, said that the VC fund would continue to invest in early-stage startups. However, over time, the fund realized that they needed more money to invest in startups in follow-up rounds. Today’s announcement comes after Accel’s investment in Israel and Europe, where it closed a $575 million fund.
“We do selective investments in companies that are progressing, like Swiggy, Bounce, Blackbuck, and UrbanClap. We have also backed these companies through Series B and Series C rounds,” he said.
Like in other countries, Accel’s reputation in India is great. The firm participated in the funding round of e-commerce firm Flipkart, which was valued at $4 million at that time. Last year, Walmart bought a stake in Flipkart for $16 billion.
Accel has nine partners and 50 total members in India.
Moreover, the firm also invested in the seed round of SaaS giant Freshworks, whose current valuation is over $3 billion. Furthermore, it invested in Swiggy, whose current valuation is $3 billion. Swiggy recently invested in cloud kitchens in India. Accel has been the first major investor in 85% of startups in its portfolio.
According to the VC firm, 44 out of the 100 startups, in which it invested, now have valuations over $100 million each. In total, Accel’s portfolio firms have created $44 billion in market value. The firm’s spokesperson said, “When we first started funding back in 2005, things were quite different. Only 1 in 50 Indians had internet access, and only a minority had mobile phones. However, we believed at that time that India is going to change the market.”
He also added, “Today, the opportunity is quite significant than when we started back in 2005. Now, 1.3 billion people own mobile phones, 600 million individuals have internet access, and around 150 million people are online transacting customers. It has made India a huge payments platform that processes around $20 billion each month.”
Thus, India has become a digital hub and an attraction for investors from all over the world. Moreover, the massive population of India has also made it a market for investors to test new ideas.
Daniel also said that, in the future, Accel would continue to focus on global SaaS, fintech, consumer, business-to-business, and healthcare categories. “We have amazing partners with their interests. They invest through their conviction and seed rounds. If we note that a particular sector or company is progressing, we do a deeper search, before investing,” he said. “After that, we get full confidence in space. For example, we invested in the mobility startup TaxiforSure; this was long before Uber came to India. That investment helped us understand mobility startups, and that’s why we have invested in several mobility startups.”
Accel has focused on India because it’s a huge market. Another reason is that several other giants, like Prosus Ventures and SoftBank, have also started investing in the region. However, the only difference is that Accel focuses on the early-stage rounds, whereas Softbank and Prosus Ventures, mostly finance the later-stage rounds.
For Indian startups and India in general, this competition is good news. Statistics have shown that Indian startups have raised a record $11.3 billion this year.
