Accel has successfully raised approximately $650 million for its eighth India fund, filings with the US Securities and Exchange Commission revealed. The decision underscores the VC firm’s unflinching faith in India’s nascent start-up ecosystem. The eighth fund, which was first announced in March 2022, strengthens Accel’s position as one of the top incubators for Indian start-ups.
Accel’s unicorn bet history
Accel has had some of the finest histories of investments in a number of India’s best-performing start-ups. The list includes some iconic unicorns, namely Flipkart, Urban Company, and Acko. These very investments, indeed, went about rewriting the very script of Indian entrepreneurship, even yielding great dividends for the VC firm itself.
One of the most significant exits it did was from Swiggy, the leading food and quick-commerce delivery platform. Accel tendered 10.5 million shares in Swiggy’s OFS with an impressive 35x return on its investment. The fact that Accel was able to manage such a strategic exit and bring the returns in an OFS underlines its strategic acumen to pick and back high-growth ventures .
Book Value Milestone Year with Public Listings
The fundraise comes at a landmark year for Accel, with two of its portfolio companies, Swiggy and Blackbuck (Zinka Logistics), going public. Swiggy’s $1.35-billion IPO in 2024 was one of the largest for a new-age company in India. This public listing not only speaks to Swiggy’s growth journey but also reflects the broader maturation of India’s start-up ecosystem.
Early investment in Flipkart
One of the biggest success stories for Accel is its early bet on Flipkart. Despite the Walmart acquisition of Flipkart in US, the VC still retained a 1.1% stake in the entity. Accel finally exited Flipkart in 2023 with estimated cumulative returns of $1.5-2 billion. It is probably an investment that has cemented Accel’s reputation as a sensible and impactful investor.
Continuous support to emerging start-ups
Accel continues investing in promising startups for raising the portfolio. This month, the firm has announced investment in a seed round from former Flipkart executive Ayyappan R’s venture called FirstClub which has raised a seed funding amount of $8 million. Recently, the firm has also funded MLOps-Generative AI Models cutting edge platform, named Simplismart. This has featured Accel at the trend list through the commitment made to staying abreast with technologies and innovation.
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Other VC firms are also deploying their capital in varying strategies. One such firm that had been among the early investors for Mamaearth and Whatfix has closed Stellaris Venture Partners’s third fund at $300 million. While the latter made a very uncommon move of shrinking its size to downsize the Peak XV Partners from its fund size to $2.85 billion by 16% or $465 million. The firm has opted to invest capital wisely and bring unutilised funds back to the sponsors.
India: The top global hot spot for start-up funding
“India has held the third slot in global receiver of start-up funding behind US and UK,” Tracxn’s ‘Geo Annual Report – India Tech-2024 says. It means that India emerges as one growing hub of techno-innovation or entrepreneurial activity from the country itself.
This $650-million fundraise by Accel, not only reflects its confidence in the Indian start-up ecosystem, but also gives a way forward for more path-breaking investments. With a proven track record and a forward-looking strategy, Accel continues to play a crucial role in shaping India’s tech-driven future.
