One of the more heavy investor in Indian startups, Accel Partners has managed to raise two gigantic funds with a net worth of $2 Billion from its investors — an impressive amount under the most conducive conditions, but particularly so now, when investors across the world are tightening their purse strings.
The amount is divided into two separate kitties — a relatively smaller $500 million fund that will be used to invest in startups undergoing their seed and Series A rounds. This fund will be focussed mainly upon US based ventures. Meanwhile the second, $1.5 billion fund is aimed towards mature companies, particularly those that have already turned profitable and are looking to raise funds for other reasons, such as expansion.
The company also managed to raise the monies at a breakneck speed — barely two months after it began. It has also managed to top its last attempt at fundraising, by almost half a billion dollars.
Meanwhile, speaking with TechCrunch, some of the senior members of the firm, including Sameer Gandhi, Ping Li, and Rich Wong, expressed their opinions on various topics.
On why the need for two separate funds, when all the money is there for the same purpose, Sameer Gandhi said that, both type of investments required their own strategies and as such, it made sense to use separate vehicles so as to keep things from mixing up.
Asked about the size of investments that the firm will be making out of these funds, Gandhi said that while the company prefers doing small seed investments of $500,000 to $8 million in seed and Series A deals — small?? — it prefers to pout in around $35 million on an average, in a growth stage company. Although, here again, its policies regarding the size of investment is pretty flexible.
On the just two year gap between this round of fundraising and its (Accel’s) last, Ping Li said,
If anything, we want to be out in the market right now because we think there are a lot of good ideas and entrepreneurs out there and that 2016 will be a good time from a tech perspective, meaning the last thing you want to is to be out of the market fundraising.
The other partners seemed similarly enthusiastic and seemed to be of the opinion that 2016 and 2017 were going to prove good years, as regards entrepreneurs and new ideas.
While reiterating his firms focus upon the US, Sameer Gandhi said that a breakout company would attract the attention — and investments — from Accel or its associates, regardless of its location on the globe. He also cited Flipkart, the India based e-retail giant, as an example.
Finally, on ‘the right time to fundraise’ and whether ‘raising quickly was the new normal’, the partners said that in their opinion, 2.5 years to three years was the right goal for fundraising, and that their firm was going to keep following the same pace in the foreseeable future.