Accel India has finally closed its latest and largest venture fund till date. The $450 million fund will start investing in startups from next year. Considering that Accel is one of the country’s most active investors and has companies like Flipkart and Freshdesk in its portfolio, the news is one that bodes well for country’s startup economy.
The new fund is Accel India’s 5th and is almost 40% larger than it’s previous March 2015 capital. Interestingly, this also takes the total assets under Accel India’s management up to somewhere in excess of $1 Billion. This also makes Accel India the third largest VC firm in the country, behind only Sequoia Capital India ($3 billion) and Nexus Venture Partner ($1.2 billion).
This latest fund was raised 21 months after its fourth raise of $305 million.This is actually faster than usual considering that Accel has the habit of raising a new fund every 3 to 4 years.
Meanwhile, Accel will mainly be targeting early stage startups who are in the midst of raising either seed or first rounds. This fund will also lay a significant amount of focus on tech, enterprise/SaaS, financial technology, business-to-business companies and healthcare. The company is also reserving a large part of the fund for follow-on deals for the tens of startups it invested in over the last couple of years.
In conversation with TechCrunch, Shekhar Kirani, partner at Accel hinted at what the future might hold.
We are seeing mass adoption of mobile technology by consumers, enterprises and small and medium enterprises. With more than 870 million mobile subscribers, more than 200 million smartphone users, more than 150 million social media users, and more than 60 million users transacting across different online segments, the market is ready for tech-led startups to build and scale their companies.
The period was pretty monumental with regards to the Indian startup ecosystem. While many companies used their investments to grow exponentially, several other managed to burn through them as well — causing many investors to tighten their purse strings. Accel hopes that things will be steadier now. As per Prashanth Prakash, partner at Accel:
This was a unique period in the Indian market and entrepreneur formation, hopefully things will be steadier and stable now.
Accel’s portfolio includes companies like Flipkart, Ola, Quikr, Bookmyshow, Bluestone, Swiggy, Freshdesk. Most of its investments are doing well although and have yielded huge returns. This track record is also a big reason why the firm is able to close its VC funds earlier than expected.
Well, here is to hoping that the fund heralds some good times for the Indian startup ecosystem, which had come under fire from VCs and saw a slowdown in investments after many startups were found to be burning through cash without any ROI on the horizon.