VC Firm Accel Partners Closes the Sixth Indian Fund Worth $550 Mn. Here's Why This is an Important Step
Accel Partners has been operating in India since 2005 and has invested in more than 100 start-ups
Venture capital firm, Accel Partners, announced the close of its sixth India fund at $550 million which will be primarily invested in seed and early stage startups in India, according to its official statement.
The Palo Alto-based VC firm has already invested in more than 100 early-stage Indian technology start-ups such as Walmart acquired Flipkart, Zomato, Swiggy, Freshworks, Ninjacart, Urban Clap, Blackbuck, Curefit, CleverTap etc.
Ruling Investments in India Since 2005
Accel made its advent in India in 2005, a time when the digital bubble had burst and India was climbing the ladder of progress and digitization. “Just 1 in 50 Indians had access to the internet and mobile phone ownership was nascent. Yet we firmly believed that India was on the cusp of a big change,” the statement read. The prediction made by Accel turned out to be true as India today has the third largest start-up ecosystem in the world after USA and China.
Highlighting how internet changed the Indian startup ecosystem, the VC said that “India can now digitally identify 1.3 billion people, has 600 million internet users and 150 million online transacting customers with a national payments platform that processes $20 billion a month.”
Is India Difficult Market For Foreign Investors
According to a Bloomberg survey, 92 per cent of respondents from Singapore, Tokyo, Melbourne, Hong Kong, London, New York, Dubai and India said that they would increase their participation in India if access was easier. About 76 per cent said that access India’s financial market is more difficult compared to other markets they participated in.
According to the report, a majority of respondents (37%) believe clear regulatory guidelines will increase ease of access and lead to deeper foreign investor participation.
India is suffering from a low investor to start-ups ratio. The number of home-grown venture capital firms, private equity firms and angel investors are numerous in India but not enough to match the needs of the rapidly expanding Indian start-up ecosystem. Big checks from international investors spur innovation and technological advancements, thus making the position of Indian start-ups competitive on the global platform.
Accel is an investor that has been supporting the Indian start-up ecosystem since the early days of Indian entrepreneurial ecosystem.
Achieving the $5 Tn Economy Goal
The government of India recently announced the goal of becoming a $5 trillion economy by 2025. Start-ups have a significant role in helping Indian economy achieve the goal. From job creation to providing technology-backed solutions to the core predicaments of society in sectors such as agriculture, healthcare, education etc, the role of Indian start-ups cannot be underestimated.
Accel recognizes this when it says, “In the last decade, Indian tech startups have created around $100 billion of enterprise value and as the GDP doubles in the next decade, we see startups creating a disproportionately higher value.”
At a time when start-ups are expected to play an important role in achieving this goal, investors’ and funding support is essential for the startups to scale up.