Accel raises $ 550 million for India's new fund

Bangalore: venture capital company Accel India , one of the main startup investors in the country, has raised $ 550 million for its sixth Indian fund at a time when the global startup ecosystem is reaching the end of an unprecedented boom cycle.

The new fund is much larger than the previous one, which had 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, from business to business ( B2B ) markets, financial technology and healthcare.

TOI had reported in October that Accel India is expected to raise a new larger fund by the end of 2019. The new fund will bring the company's total assets under management (AUM) to $ 1.56 billion in six funds. The venture capital firm does not see any impact of the global counter winds on the initial investments in the initial stage and of the A series in which it focuses. “We have been on the ground for 15 years and have seen multiple cycles. We continue to make reality checks with our portfolio telling them if things are going well does not mean that you are on top of the world, said partner Subrata Mitra.

Accel is one of the few VC enterprises, 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 such as Freshworks, which was recently valued at $ 3.5 billion, and markets for agricultural products such as Ninjacart and the BlackBuck online truck platform. Other portfolio companies include digital insurer Acko and start of health and fitness . The venture capital firm now has 44 companies that are valued at more than $ 100 million, compared to just 10-15 three years ago.

According to Accel India partner Prashanth Prakash, 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.