Accel raises $550 mn for new India venture capital fund
Accel investment team

Venture capital firm Accel Partners has raised $550 million (Rs 3,942 crore) under a new fund to make seed and early-stage investments in Indian startups, it said on Monday.

This is the sixth and largest fund for the Silicon Valley-based global VC firm that has previously backed leading internet companies like Flipkart, FreshDesk, Myntra and BookMyShow.

The new fund comes three years after its fifth fund where it had raised $450 million.

"With a robust digital infrastructure firmly in place (and expanding rapidly), we expect digital adoption in India to only accelerate. We see this trend playing out not only in categories like food delivery, digital payments, and e-commerce, but also across sectors like agritech, education, insurance, logistics, healthcare, real estate, and manufacturing,” the firm said.

The firm estimated that in the last decade, Indian tech startups have created around $100 billion of enterprise value and as the GDP doubles in the next decade, it foresees startups creating a disproportionately higher value.

Accel, which typically comes in at a seed stage and then keeps on making follow-on investments, has been the first institutional investor in more than 85% of all its 100-plus portfolio companies.

It struck its biggest bet when it started with an $800,000 investment in Flipkart and continued backing the company until its acquisition by Walmart valued it at over $21 billion—the largest-ever acquisition of a private, venture-backed company in the world.

The firm also cited the success of Freshworks, where it first invested in 2011. “Back then software-as-a-service as a category from India was almost non-existent. Our first cheque was $1 million when the company had six employees. Today, it has more than 2,500 employees and is valued at $3.5 billion,” Accel said.

It also referred to its $1 million seed investment in Swiggy when it was making around 100 deliveries a day in Bengaluru. The food-tech venture now handles more than 1 million daily orders and is valued at $3.4 billion.

Accel has also been the first VC to back companies such as Acko, Blackbuck, BookMyShow, Bounce, BrowserStack, Clevertap, Curefit, Mindtickle, Moglix, Ninjacart, Portea, Rupeek, Samunnati, StanzaLiving, UrbanClap and Zenoti among others.

It had raised its first India fund—the $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 joins a number of India-focussed funds in hitting fundraising milestones this year.

Just last month, Inventus Capital Partners hit the final close on its third venture capital firm, raising Rs 369 crore ($52 million), with bulk of the money coming from local investors.

In August, DSG Consumer Partners scooped up $65 million for its third fund. In June, A91 Partners, a venture capital firm floated last year by former Sequoia Capital executives, closed its debut fund with a $351 million (Rs 2,403 crore) corpus, the largest fund raised by a new VC firm.

In May, homegrown venture capital firm Nexus Venture Partners received commitments from a few more LPs for its fifth fund that has a target corpus of $450 million.

Also in May, Endiya Partners marked the first close of its second fund at $40 million. Vertex Venture Holdings Ltd, an early-stage venture capital firm backed by Singapore's Temasek Holdings, and Japanese VC firm GREE Ventures also announced fundraising milestones the same month.

Early-stage VC firm Artha Venture Fund marked the second close of its debut fund at more than Rs 100 crore in June.

Other VC firms that have announced fundraising milestones this year include impact investor Omnivore, deep-technology and B2B-focussed VC firm StartupXseed, early-stage venture capital firm 3one4 Capital and Entrepreneur First.

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