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Accel: $650 million funds to Indian start-ups

Accel’s investment in Indian Start-ups

Accel has announced its seventh fund in India, with $650 million to invest, as the remarkable venture capitalist seeks to double his bets on the world’s second-largest internet market and also accelerate more extremely in the Southeast region, so was said by two partners in an interview.

The launch of the new fund, with the first set of cheques expected to be cleared within weeks, comes less than two-and-a-half years after Accel announced its sixth fund, in late 2019.

Startups Funded by Accel Partners | Accel FundingThe large portfolio had been created by the partners of a company in a South-Asian province. Some of his notable investments include backing Flipkart, which sold a majority stake to Walmart in 2018; Freshworks, which went public last year; Swiggy, the best food delivery startup; FalconX institutional cryptocurrency trading and management platform; Spinny used car market; Vedantu e-learning platform; and B2B marketplaces Zetwerk, Infra Market and Moglix.

For most of its financing, Accel is the leading institutional investor in a startup, said Shekhar Kirani, a partner at Accel. For example, he participated in a seed funding round of e-commerce company, Flipkart, which was later valued at $ 4 million. It helped Accel raise more than $1 billion from Flipkart, which is now valued at more than $36 billion.

Kirani, a co-partner of the firm, particularly credits the emergence of new ventures, railway lines as well as UPI payment infrastructure, and GST system to fuel India’s startup growth over the past decade. He predicts that the Indian economy will outpace the growth rate seen over the past decade within a few years. The organization strategizes to accelerate in specific areas, including web3 and the business-to-business marketplace, said Barath Subramanian, another Accel partner, long-time before the organization desired to accelerate and start their investment with new funding in the south-eastern Asian region.

The co-partners of the firm said that they compete and work with – many US peer-to-peer funds, including Sequoia Capital India and Lightspeed Venture Partners. Unlike many of its rivals, Accel is more cautious, writing fewer cheques and abandoning startups if they do not think they can work with the founders.

They had to work with a startup for more than ten years. It was further added, that it was vitally important for them to realize that they could work together.

A lot has changed in the Indian startup ecosystem since Accel arrived in the country. Local businesses raised a record $39 billion last year, up from just a few million, a decade ago.

In recent quarters, it has been observed that the investors of the firm are very optimistic about how they have valued some of the startups. Alpha Wave Global, Tiger Global, and SoftBank were active in India, last year. The first two have won deals because of their valuation and the amount of capital they give startups.

The companies are also asking for some sort of agreement because they are not fighting for many rights in the future. In recent months, as problems have begun to emerge with this approach, many investors have begun to return to being more cautious, questioning future rights and lowering valuations.

“The mass market often resonates with the private market because ultimately all these startups have to go public and list at the right valuation. The Public Market in the years 2019, 2020-21 exploded exponentially, and you have seen its reflection in the private market,” he said.

“This valuation multiplies with the benefits of our startups as well. But the only thing I am saying is that if you look at our businesses, they are all good, sustainable unit economy businesses, not fluffy, no-revenue businesses. So we were very careful because we have always been very conservative. We don’t like our founders racking up ratings and continuing to raise funds,” he said.

Therefore, in recent years the foreign investment in Indian startups is rising day-by-day. Foreign investors invest in Indian Startup firms as they see a lot of potential to grow and give good returns to the investors. Hence, investment in Indian Startup ecosystem is growing determinedly. 

 

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