Accel’s venture capital company declared its seventh fund for India on Tuesday. At USD 650 million, Accel’s most recent fund is its single most colossal one yet for an early-stage technology venture in India and Southeast Asia.
Apart from the early-stage tech venture, Accel possesses a USD 1.7 billion Growth Fund and a USD 2.3 billion Leaders Fund, a vehicle that has underpinned late-stage firms from India such as Swiggy, Eruditus, and BrowserStack.
Fascinatingly, the market worth of Accel’s portfolio of firms from India went beyond the USD 100-billion threshold when it unveiled its seventh fund in February 2022. This was almost double the growth over the market value of its firms when it bolted its last fund in 2019.
The new fund will also capitalise on Southeast Asian technology start-ups, a first for Accel. Accel follows the trend of rival venture capital companies, Lightspeed India and Sequoia, which extended into Indonesia and Singapore.
Accel’s new fund accomplished its USD 550 million funds raised in the dusk of 2019 and presently manages more than USD 2 billion in assets in India.
Accel will double down on the domains it has capitalised on so far, including financial technology, eCommerce, software, healthcare, and Web3. Web3 is an all-encompassing term that conceals crypto and the metaverse.
The firm will chiefly invest in Seed and Series A start-ups from its new-fangled fund, compared to contemporaries like Elevation Capital and Sequoia India, investing in later stage firms from their respective funds. Elevation Capital is raising USD 600-650 million, and Sequoia India is also raising a USD 2.8 billion fund, MoneyControl reported earlier.
With several venture capital funds ramping up crypto deals and hiring specialist investors, Accel India seeks to go into individual blockchains and capitalise in enterprises that enable Web3. The firm is an investor in a crypto brokerage dubbed FalconX, valued at USD 3.75 billion. FalconX’s founder was before an associate with Accel.
Media reports portrayed that the firm was discoursing to raise USD 800 million to a billion dollars for its new-fangled fund. However, a comparatively more minor fund may also describe cautiousness from Accel, which by far has a healthy track record of returning money to investors. The beneficial track record reflects the firm’s early bid on online retailer Flipkart, which Walmart took over for USD 16 billion.
The firm’s most colossal challenge presently includes a war for talent foraying within start-ups. In addition, employees are swiftly resigning in flocks as other firms are willing to pay record amounts of money amidst talent scarcity.
Accel’s most effective funds in India
In an interview with YourStory, Accel’s Shekhar Kirani stated that the firm possessed a selected group of limited partners (LPs) in the colossal double-digits who worked with the firm. Kirani highlighted that this group had committed to the firm in the long run, from when the company’s Indian funds were trivial and not yet exposed to the Indian market.
As the firm’s fund size enlarged, Fund 2 and Fund 3 began performing well. With the onset of fund performance, the firm started exposing itself to a vast audience within its Accel LP cesspool.
Returns from Accel’s previous funds
Shekhar Kirani told YourStory that the firm performed immaculately well with Fund 2’s Flipkart fund, presented over a decade ago. Fund 2 was trivial, and Flipkart was a humongous exit for the firm. The firm still possesses some equity in Flipkart. However, several other firms within that fund were also performing well. Kirani stated that it portrayed a massive return from an IRR perspective.
Within Fund 3, which was approximately ten years old, the firm encompasses Chargebee, Freshworks, MindTickle, Ola, and other elite quality firms, of which Freshworks had gone public. Hence, Fund 2 and Fund 3 were beginning to profit from returns, through which the firm could pay back its investors.
Kirani indicated that Funds 4,5 and 6 were still in their seed stages. The funds contain Swiggy, Zenoti, Urban Company, and several such start-ups beginning to scale.