United State’s based Accel Partners, a venture capital firm, has raised about $550mn for its 6th fund specifically for investments in India’s booming start-up ecosystem.
This fund is a notch higher than its 5th fund which set a figure of about $450mn in 2016. Accel has so far raised $1 billion capital across five rounds and has 44 companies with more than $100 million valuation. “Accel has invested in five large categories in the past decade: consumer internet, software, business-to-business, healthcare, and financial technology. It will continue to invest in these spaces and more”, said Anand Daniel, a partner at Accel India. Major start-ups in Accel’s India portfolio include Acko, Akamara, Blackbuck, BookMyShow, Bounce, BrowserStack, Clevertap, Curefit, Drip Capital, Ninjacart, Portea, Rupeek, Samunnati, StanzaLiving, UrbanClap, USPL, Zetwerk, and Zinier.
Accel started its operations in India in 2005 and since then has been on an inclination towards rapid growth in its portfolio. “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 said in an official release.
Accel’s earliest investment in India was with e-commerce company Flipkart and it kept on backing the online retailer until it was acquired by Walmart in 2018 for $16bn. Accel gained a profit of $1bn out of the deal between Walmart and Flipkart. In the past few years, Accel has rapidly expanded its operations in India and now has a team of 51 employees and nine partners as of 2019. Being a seed-stage investor, Accel has emerged to be the institutional investor in 85% of its invested start-ups.
In 2008, Accel also bought the Indian venture capital firm, Erasmic Venture Fund and it’s founders Subrata Mitra, Mahendran Balachandran and Prashanth Prakash joined Accel as partners. While speaking to media, Prashanth Prakash said, “Globally, there are very few investors who have consistently invested only at the seed-stage for this long and at our scale. We are a specialist seed-stage investor, and that is our clear strength. With the sixth fund, too, we will primarily invest in seed-stage startups”
The set-up of a 6th fund comes at a time when globally there is a crunch in the funding environment after long and continuous investments. Accel believes that with the growing internet consumers in India there is a big source of talent that needs to be tapped. As of the latest data in 2019 India is home to 600mn active internet users that generate about $20bn a month in online transactions.