Flipkart, the sponsor of Swiggy Accel raises $ 550 million for India's new fund
Risk capital firm Accel India , one of the leading newly created investors in the country, has closed $ 550 million for its sixth fund in India at a time when the world startup ecosystem It is reaching the end of an unprecedented boom cycle.
The new fund is much larger than the previous fund, which raised $ 450 million in December 2016, as the first institutional support for unicorns as an e-tailer Flipkart and food delivery platform Swiggy seeks to support a new generation of startups in areas such as social commerce, urban mobility, specialized software, business-to-business (B2B) markets, financial technology and medical care.
TOI had reported in October that Accel India is expected to raise a larger new fund by end of 2019. The new fund will take the overall assets under management of the firm to $1.56 billion across six funds.
The VC firm does not see any impact of the global headwinds on early-stage investments at seed and series A stage that it focuses on. “We have been on the ground for 15 years and we have seen multiple cycles. We keep doing reality checks with our portfolio telling them if the going is good doesn't mean that you are on top of the world,” said partner Subrata Mitra.
Accel is one of the few Venture Capital Companies which has delivered large cash exits including Flipkart, where it is estimated to have reaped close to $ 1.4 billion on a $ 100 million investment, besides smaller ones like Simility (acquired by Paypal for $ 120 million) and Qwikcilver (acquired by Pine Labs for $ 110 million) giving LPs, as investors in funds are known, consistent returns. It has also seen several of its portfolio companies in consumer internet like home services player UrbanClap (valued at close to $ 1 billion) and Swiggy (valued at $ 3.3 billion) see their worth multiply.
But what has helped set Accel apart is its portfolio in the B2B space, both software as a service (SaaS) companies like Freshworks, which recently got valued at $3.5 billion, and marketplaces for agri-products like Ninjacart and online trucking platform Blackbuck. Some of the other notable portfolio companies in areas like fintech include digital insurer Acko and healthcare include Cure.fit. The VC firm now has 44 companies that are valued over $100 million, as compared to just 10-15 three years ago.
According to Prashanth Prakash, partner at Accel India , the firm has increasingly kept higher reserves for follow on investments in every fund. “You don't want to be caught unawares in terms of market cycles where you are not able to fund good companies or some late bloomers in the portfolio,” he said.
Accel India has seen the most stable team in the Indian VC landscape, with partners including Prakash, Mitra, Mahendran Balachandran, Dinesh Katiyar, Shekhar Kirani and Anand Daniel who have been with the firm for at least 8-9 years. The firm had also promoted three principals – Barath Subramanian, Prayank Swaroop, and Abhinav Chaturvedi – to partners earlier this year.