Accel raises $650m for seventh India fund
Accel Partners has raised USD 650m for its seventh India VC fund, which will also make early-stage investments in Southeast Asia. The firm’s total assets under management in the region now top USD 2bn.
It continues a steady increase in fund size with each vintage. Accel secured USD 550m in commitments for Fund VI in 2019. Funds III, IV and V closed on USD 157m, USD 325m, and USD 450m in 2011, 2015, and 2016, respectively.
The firm noted that when it launched Fund I in 2005, just one in 50 Indians had access to the internet, yet the key ingredients for a significant technology ecosystem were evident: a young and vibrant pool of technical talent, an emerging middle class with increasing means to consume, and individuals with aspirations to innovate and build companies.
“All that was needed was time and a spark of creativity to set it in motion,” the Accel team said in a statement. “India has now become a start-up powerhouse. Indian start-ups raised USD 42bn in the year 2021 alone, up from USD 11.5bn in the previous year. India also saw more unicorns created in 2021 than in all the previous years combined.”
Recently anointed unicorns in the Accel portfolio include software-as-a-service (SaaS) companies Zenoti and Chargebee, automotive marketplace Spinny, online education provider Vedantu, brand agglomeration platform Mensa Brands, B2B marketplaces Moglix and Infra.Market, trucking platform BlackBuck, digital native insurer Acko, and sales enablement platform MindTickle.
Accel further underlined its SaaS credentials as BrowserStack became the most valuable start-up of its kind in India – before being overtaken later in the year by Postman – and Freshworks completed a USD 1bn IPO in the US. Freshworks was in the first batch of Indian SaaS unicorns and Accel backed it from the seed round onwards, as was earlier the case with online retailer Flipkart.
Digital adoption is expected to accelerate in India and Southeast Asia, with the former moving from 200m to 500m digitally transacting consumers over the next five years. Meanwhile, the opportunity set will broaden, taking in not only financial services and e-commerce, but also agriculture, education, insurance, logistics, healthcare, real estate, and manufacturing, the statement added.
Digitalisation and enterprise services will continue to be mainstays of the Accel strategy. The firm will also maintain its focus on getting in early: it is the first institutional backer of 85% of its portfolio companies in the region, and 95% of investments are seed or Series A.
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