Accel has announced its seventh India fund with $650 million to invest as the storied venture investor looks to double down on its bet in the world’s second largest internet market and also be more aggressive in the Southeast Asia region, two partners told TechCrunch in an interview.
The unveiling of the new fund, whose first set of checks are expected to be wired within weeks, comes less than two and a half years after Accel unveiled its sixth fund in late 2019.
The Silicon Valley venture capital firm, one of the earliest investors in India, has a large portfolio of unicorn startups in the South Asian country. Some of its notable investments include Flipkart, which sold majority stake to Walmart in 2018, Freshworks, which went public last year, top food delivery startup Swiggy, institutional crypto trading and management platform FalconX, and business-to-business marketplaces Zetwerk, Infra.Market and Moglix.
In the vast majority of its backings, the firm is the first institutional investor in a startup, said Shekhar Kirani, a partner at Accel. It participated in the seed financing round of e-commerce firm Flipkart, which was then valued at $4 million post-money. Walmart bought a majority stake in Flipkart for $16 billion. (This helped Accel net more than $1 billion in return from Flipkart, which was last valued at over $36 billion.)
Some of the firm’s top performing startups put together have exceeded $100 billion in valuation, he said.
Kirani, who has been with the firm for a decade, credited the emergence of railroads such as payments infrastructure UPI and GST for propelling the growth of the Indian startup in the past decade. He said the Indian economy will surpass the growth seen in the past decade in within a few years.
The firm plans to be more aggressive in certain sectors including Web 3 and business-to-business marketplaces, said Barath Subramanian, another partner at Accel. The firm, which began investing in Southeast Asia a few years ago, also plans to be more aggressive in the region with the new fund, they said.
Accel today competes with — or as its partners would say, works with — many peer American funds including Sequoia Capital India and Lightspeed Venture Partners. Unlike many of its rivals, Accel has demonstrably been more conservative, writing few checks and backing away from startups if they don’t think they can work with the founders.
“We have to work with a startup for 10 years. It’s very important for us to know that we all can work together,” he said.
A lot has changed in the Indian startup ecosystem since Accel first arrived in the country. Local firms raised a record $39 billion last year, up from a few million dollars from a decade ago. But some of the recent jump startups’ valuations and money being bandied out don’t appear to be sustainable.
This is a developing story. More to follow…