Flipkart-backer Accel raises $550 mn India fund for seed and early stage startups

Palo Alto, California headquartered venture capital firm Accel closed its sixth successive India-specific fund at $550 million, taking its overall assets under management here to more than $1.5 billion.

Dubbed Accel India VI LP, the Cayman Island registered fund raised commitments from nearly 100 investors, regulatory filings dated December 2 showed. The firm last raised a fund for India, the $450 million Accel India V LP, in 2016.

The firm said in a statement that it would stick to its 15-year mandate to primarily back seed and early stage startups from the new fund, its largest for this market. Over the years, the firm has typically been the first institutional investor in more than 85% of the more than 100 companies its has backed here.

“We largely prefer to be a founder’s first partner because it is where we believe that we can help the most. We are not passive investors, and our team has significant insights and frameworks to help younger companies throughout their growth. We support our startups in the following areas: product and scale thinking, brand and digital marketing, organizational scaling and culture, and financial metrics,” the firm said.

Accel’s most well-known investment in India is Flipkart, the Bengaluru headquartered ecommerce company that was acquired by Walmart in May last year. The firm entered Flipkart with a $800,000 investment in 2008 and continued to top up its investment till the acquisition. At the time of the acquisition, Flipkart was valued at over $21 billion.

Apart from Flipkart, Accel’s other early bets include SaaS firm Freshworks and food delivery unicorn Swiggy. It first backed Chennai-born Freshworks with a $1 million cheque in 2011. It invested a similar sum in Bengaluru headquartered Swiggy in its 2015 seed round. Freshworks is now valued at $3.5 billion, while Swiggy is valued at $3.4 billion.

It is also an investor in ticketing platform BookMyShow, logistics platform BlackBuck, which was valued at $924 million in its last funding round, agri-marketing platform Ninjacart, SaaS company Zenoti, which focuses on the beauty and wellness segment, and online insurance player Acko, among several others.

“With a robust digital infrastructure firmly in place (and expanding rapidly), we expect digital adoption in India to only accelerate. We see this trend playing 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,” said the firm in a statement.

For the new fund, it will invest in technology businesses across sectors such as agritech, education, insurance, logistics, healthcare, real estate, and manufacturing, apart from continuing to back businesses in areas such as food delivery, digital payments, and ecommerce. “With a robust digital infrastructure firmly in place (and expanding rapidly), we expect digital adoption in India to only accelerate. 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,” the firm said.

Accel’s sixth fund is the second largest India-specific fund in the market currently after Sequoia Capital India’s $695 million sixth fund raised in August last year. The last 12-18 months have seen several smaller funds raised for this market as investor interest India’s technology startup market remains buoyant. Last month, Mumbai based seed investment focused firm India Quotient raised $60 million for its third fund and $40 million for an opportunities fund. Bengaluru-based consumer brands focused Fireside Ventures raised a similar corpus the same month as part of the first close for its second fund.

In October, Singapore-headquartered Jungle Ventures closed its third India and Southeast Asia focused fund at $240 million. In September, Mumbai-based Lightbox raised $209 million for its third fund.