Global venture capital firm Accel announced on Monday that it has raised a USD 650 million early-stage fund to fuel the next generation of category-defining startups in the focus sectors of artificial intelligence (AI), consumer, fintech and manufacturing.
Accel is the first institutional investor in 80 per cent of its portfolio companies. The portfolio companies of note include BlackBuck, BlueStone, Cult.fit, Flipkart, Freshworks, Swiggy, Urban Company, and Zetwerk.
"Accel, a leading global venture capital firm, today announced that it has raised a USD 650 million early-stage fund dedicated to supporting bold founders in India and Southeast Asia," the company said in a release.
The new fund is the eighth by Accel in India and Southeast Asia and aligns with its commitment to partnering with early-stage founders to set up disruptive, category-defining businesses that can yield meaningful impact. Target areas include AI, consumer, fintech and manufacturing.
On Accel's watch will be all those platforms that allow enterprise AI use cases through agentic technologies - LLMs and SLMs, Services as Software firms (AI startups leveraging India's large IT services capabilities to offer better automation offerings) and vertical AI (startups leveraging India's large AI talent pool to integrate AI in vertical-specific use cases).
In focus on the consumer side will be startups catering to the top 30 per cent of households in India's tier 2 plus regions (a category described as `Bharat'), those catering to the increasing demand by Indian consumers for higher service levels (India native), and those aiming at capitalising on the increasing discretionary spending of India's consumption-first Gen Z demographic (aspirational brands).
The statement further said the fintech space would include wealth management space: startups catering to high net worth consumers seeking personalized wealth advisory services through digital channels, fintech infrastructure: startups bringing banks and fintechs together to enable best-in-class digital experiences for consumers and businesses, and digital distribution: those accelerating distribution of financial products by leveraging India's digital public infrastructure.
The focus areas within the manufacturing space are: Startups catering to global demand for diversified supply chains, from India to global; high-quality production and IP-driven, value-added manufacturing from India native; and next-gen digital technologies transforming every factory floor to more efficient operations, higher-quality output, and sustainability, which is Industry 5.0.
Most median economic projections expect India to be a long-term growth story. As the fastest growing major economy globally, India's GDP per capita is projected to rise by 60 per cent from USD 2,700 in 2024 to USD 4,300 by 2029.
In sync with the strong fundamentals, India's consumption story is expected to remain robust, and investments in public and digital infrastructure are expected to deliver sustained long-term economic growth.
While India's public markets have grown three times over the last 10 years, venture capital backed companies represent less than five per cent of the market capitalisation.
Public markets have begun embracing technology-led businesses, as evidenced by two of the most recent listings, BlackBuck and Swiggy, both companies where Accel was the seed investor, according to the company.
"India is at an inflection point. Over the next decade, we are poised to add more to our GDP than we have in our economic history," said Prayank Swaroop, partner at Accel. The surface area of the opportunity for Indian founders to build and scale businesses that deliver large-scale impact is "huge".
"With this latest fund, we are focused on AI, consumer, fintech, and manufacturing -- areas that are reshaping industries and addressing the needs of a rapidly-evolving market," Swaroop said.
Digital adoption, he observed, is accelerating across urban and rural India, and founders are poised to solve real-world challenges and create solutions of global relevance.
"We believe that the next set of category creators will come from those who will be able to combine deep innovation with deep understanding of customer needs," said Swaroop.
With 16 years of strong track record in India and South East Asia, Accel said it has been partnering with the companies that reimagined e-commerce and SaaS to the manufacturing industry.
Accel has invested heavily in companies across sectors such as Amagi, Acko, BlackBuck, BlueStone, BrowserStack, Cult.fit, Flipkart, Freshworks, Swiggy, Urban Company, and Zetwerk.
Shekhar Kirani, partner at Accel, said that India's startup ecosystem is increasingly becoming the driving force behind the nation's economic progress, with VC-backed companies crossing USD 50 billion in public market capitalisation.
"Indian founders have built resilient and enduring businesses which have been embraced by the public markets. As India's GDP and public market cap grow, we expect large outcomes from disruptive businesses led by bold and visionary founders," Kirani said. He added that Accel strives to be the first partner to exceptional entrepreneurs, as always.
In recent years, Accel has launched some key initiatives to make a founder's journey as frictionless as possible and fuel the ecosystem's growth, the company said.
The firm's open-source content and community platform, SeedToScale, democratizes company-building knowledge with actionable insights from successful founders, operators, and industry leaders. Its early-stage scaling program, Accel Atoms, which is in its fourth iteration, has so far supported 36 startups, collectively raising over USD 200 million, the firm said.
In the last two years alone, Accel invested in over 27 AI startups in India or by Indian-origin founders.
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