Accel Raises $650 Million Fund to Back Disruptive and Category-Defining Businesses
Venture capital firm Accel Partners announced on Monday that it has raised a $650-million early-stage fund in India, its eighth in the country, to support innovative companies poised to shape key sectors like artificial intelligence (AI), consumer, fintech, and manufacturing.
The fund is designed to back "disruptive and category-defining" businesses with significant growth potential, says Prayank Swaroop, partner at Accel. India's rapidly evolving market presents a unique opportunity for founders to build and scale impactful businesses, according to Swaroop.
Investments Will Focus on AI, Consumer, Fintech, and Manufacturing Accel plans to focus its investments in areas like enterprise AI, software-as-a-service (SaaS) firms, vertical AI companies, consumer startups from non-metro cities, and aspirational brands catering to India's consumption-first Gen Z demography. The firm also aims to support wealth management startups, fintech infrastructure, and manufacturing entrepreneurs developing innovative solutions.
Return on Investment for Previous Portfolio Companies Accel's latest fund comes weeks after Swiggy and Blackbuck went public, with Accel earning a whopping 35-fold return on its $20-million investment in the food delivery major. The firm has also witnessed significant returns from other portfolio companies, including Flipkart, which was sold to Walmart for $16 billion in 2018.
Fund Raisings by Fellow Investor A91 Partners Interestingly, fellow venture capital firm A91 Partners is also raising $700 million in its largest fund yet. Similar to Accel, A91 is doubling down on India's thriving startup ecosystem.
Market Outlook and Future Investments Despite some adjustments from other venture capital firms, Accel expects significant investments in 2025 as they continue to tap into the growth potential of India's vibrant startup scene. "Indian founders have built resilient and enduring businesses which have been embraced by public markets. As India's GDP and public market cap grow, we expect large outcomes from disruptive businesses led by bold and visionary founders," adds Shekhar Kirani, a partner at Accel.
Accel generated cumulative returns of around $1.5-2 billion on investments made over several years, making it a prime example of the firm's commitment to supporting ambitious startups in India's ever-growing ecosystem.