Venture capital firm Accel Partners has raised $450 million under a new fund to make seed and early-stage investments in Indian startups, it said. This is the fifth and the largest India fund of the Silicon Valley-headquartered VC firm which has been an early backer of leading internet companies including Flipkart, BookMyShow, Myntra, FreshDesk and BlueStone, among others.
The new fund has been raised barely 20 months after it raised its fourth fund. It has mopped up nearly 50% more money in the latest outing.
Accel said that the new capital will be dedicated exclusively to invest in seed and early stage startups in the country. “More than 80% of our 100 plus India investments started out as seed investments. We enjoy working with startups from the seed stage … These critical periods of development are where we believe we can have the most enduring impact and that is what keeps us motivated,” it said.
Accel has deployed around $500 million in Indian startups in the past 10 years. It had raised its first India fund—$10 million Accel India Venture Fund— in 2006. It raised its $64 million second fund in 2008 and $155 million third fund in 2011.
Accel’s other major portfolio companies include PropTiger, BlackBuck, BlueStone, CommonFloor, FreshDesk, Mitra Biotech, Portea, Power2SME, Swiggy and UrbanClap.
The new fund comes at a time when a lot of new VC funds have been raised or are in the process of being raised. Venture capital funding had slowed after a peak in 2015 but the quantum of fresh money being raised by VC firms holds out hope that Indian startups will again see better days in the coming year.
"With our latest fund, we are actively looking to invest in technology entrepreneurs across sectors such as consumer, enterprise/SaaS, financial technology, India B2B (business-to-business) and healthcare," it said.
Founded 30 years ago in Silicon Valley, Accel has been globally acclaimed for some of its early bets including Facebook and Dropbox.
The private equity deals in India – the capital invested by angel investors, VCs and PE firms – have been on a sharp decline in India. The News Corp VCCEdge deal report has showed that private equity deals have halved in the last quarter.
However, this has not deterred VC firms from launching new funds. In September, early stage venture capital firm YourNest launched its second fund, YourNest India Fund II, with a target of raising Rs 300 crore.
Earlier in September, the founders of Mumbai-based co-working space provider and startup accelerator Z Nation Lab said it was planning to launch a seed-stage venture capital fund to back technology firms.
Last month, another early stage investor Ventureast Fund Advisors India Ltd had announced the first close of its sixth fund—Ventureast Procative Fund II (VPF2)—at $83 million en route to a target corpus of $150 million in total.
Unitus Seed Fund is also looking to mark the first close of its $50 million second fund by the end of 2016.
In August, LetsVenture founder Manish Singhal floated an early stage venture fund called Pi Ventures with entrepreneur Umakant Soni.
In January, early-stage venture capital firm Endiya Partners—floated by former managing partner of Ventureast Sateesh Andra along with Ramesh Byrapaneni and Abhishek Srivastava—had raised $15 million (Rs 100 crore) to mark the first close of its new fund.
Inventus Capital Partners, Kalaari Capital and IDG Ventures are also looking for investors for their new funds. Sequoia Capital too is on course to raise a new India fund which is likely to have a corpus of $800 million.
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