VC-backed companies built $50+ bn in public market capitalisation
Global venture capital group Accel of Palo Alto says the US$650 million raised as early-stage fund to fuel the next generation of category defining startups in the focus sectors of artificial intelligence (AI), consumer, fintech and manufacturing including prospects in India.
The US$650 million early-stage fund is dedicated to supporting bold founders in India and Southeast Asia, the company said in a release on 5 Jan 2025.
Accel is the first institutional investor in 80% of its portfolio companies. Its prominent portfolio companies include BlackBuck, BlueStone, Cult.fit, Flipkart, Freshworks, Swiggy, Urban Company and Zetwerk.
Accel said its latest fund – eighth in India and Southeast Asia — builds on its commitment to partnering with early-stage founders to establish disruptive, category defining businesses that create meaningful impact. Sectors in focus for this fund include AI, consumer, fintech and manufacturing.
On Accel’s radar will be platforms that enable enterprise AI use cases using agentic technologies, LLMs and SLMs (large language models and small language models), Services as Software firms (AI startups taking advantage of India’s large IT services capabilities to provide better automation offerings) and vertical AI (startups taking advantage of India’s large AI talent pool to integrate AI in vertical specific use cases).
In focus on the consumer side will be startups catering to the top 30% of households in India’s tier 2 plus regions (a category described as `Bharat’), those catering to the increasing demand by Indian consumers for higher service levels (India native), and those aiming at capitalising on the increasing discretionary spending of India’s consumption-first Gen Z demographic (aspirational brands) https://sbi.com.in/.
The statement elaborated that the fintech space would include startups catering to affluent consumers seeking personalised wealth advisory services through digital channels (wealth management space), startups bringing banks and fintechs together to enable best-in-class digital experiences for consumers and businesses (fintech infrastructure), and those accelerating distribution of financial products by leveraging India’s digital public infrastructure (digital distribution).
Focus areas within the manufacturing space include startups catering to global demand for diversified supply chains (India to global), those focused on high-quality production and IP-driven, value-added manufacturing (India native), and next-gen digital technologies transforming every factory floor leading to more efficient operations, higher-quality output, and sustainability (Industry 5.0).
Most median economic projections expect India to be a long-term growth story. As the fastest growing major economy globally, India’s GDP per capita is projected to rise by 60% from US$2,700 in 2024 to US$4,300 by 2029.
In sync with the strong fundamentals, India’s consumption story is expected to remain robust, and investments in public and digital infrastructure are expected to deliver sustained long-term economic growth.
While India’s public markets have grown three times over the last 10 years, venture capital backed companies represent less than five per cent of the market capitalisation.
Public markets have started to embrace technology-led businesses, as demonstrated by two of the most recent listings, BlackBuck and Swiggy, both companies where Accel was the seed investor, according to the company.
“India is at an inflection point. Over the next decade, we are poised to add more to our GDP than we have in our economic history,” said Prayank Swaroop, partner at Accel. The surface area of the opportunity for Indian founders to build and scale businesses that deliver large-scale impact is “huge”.
“With this latest fund, we are focused on AI, consumer, fintech, and manufacturing — areas that are reshaping industries and addressing the needs of a rapidly-evolving market,” Swaroop said.
Digital adoption, he observed, is accelerating across urban and rural India, and founders are poised to solve real-world challenges and create solutions of global relevance.
“We believe the next wave of category creating companies will come from those who can combine innovation with a deep understanding of customer needs,” according to Swaroop.
With 16 years of solid track record in India and Southeast Asia, Accel has partnered with companies that have ‘reimagined’ industries from e-commerce and SaaS to manufacturing, the venture capital firm said.
Accel has made substantial investments in companies across sectors such as Amagi, Acko, BlackBuck, BlueStone, BrowserStack, Cult.fit, Flipkart, Freshworks, Swiggy, Urban Company and Zetwerk.
Shekhar Kirani, partner at Accel, noted that India’s startup ecosystem is increasingly becoming the driving force behind the nation’s economic progress, with VC-backed companies surpassing US$50 billion in public market capitalisation.
“Indian founders have built resilient and enduring businesses which have been embraced by the public markets. As India’s GDP and public market cap grow, we expect large outcomes from disruptive businesses led by bold and visionary founders,” Kirani said. He added that Accel strives to be the first partner to exceptional entrepreneurs, as always.
In recent years, Accel has launched some key initiatives to make a founder’s journey as frictionless as possible and fuel the ecosystem’s growth, the company said.
The firm’s open-source content and community platform, SeedToScale, democratises company building knowledge with actionable insights from successful founders, operators, and industry leaders. Its early-stage scaling programme, Accel Atoms — now in its fourth iteration — has supported 36 startups to date that have collectively raised over US$200 million, the company said.
In the past two years alone, Accel invested in over 27 AI startups in India or by Indian-origin founders. Fiinews.com
