Accel Partners, the globally-renowned venture capital and private equity fund, is set to embark on a fresh round of fund-raising dedicated to India. According to investment bankers, Accel Partners is understood to be firming up plans for a $125 million fund which will be its third in India.
The Palo Alto, California-headquartered marquee venture capital fund, best known for investing early on in Facebook and Groupon, is understood to have sounded out its intent to various large fund of funds. The management of Accel Partners India offered not to comment on the fresh round of fund-raising. Accel Partners entered India in late 2008 when it acquired Bangalore-based early stage venture capital fund - Erasmic Partners. Erasmic at that stage was managing a $15 million fund. Accel post that went on raise its second fund in India and as of now manages a total $80 million and has so far backed 30 companies.
Founded in 1983, Accel Partners has a long history in the global venture capital and growth equity business. Accel today invests globally using dedicated teams and market-specific strategies for local geographies, with offices in Palo Alto, California, London and Bangalore; as well as in China via the IDG-Accel Partnership.
With over $6 billion under management, Accel has helped entrepreneurs build over 300 successful category-defining companies including: Alfresco, Arrowpoint, Baidu, ComScore, Foundry Networks, Infinera, Interwoven, JBoss, Kayak, Macromedia, PolycomôPictureTel, Real Networks, Riverbed, Veritas, Walmart.com besides various others.
This news of Accel raising an India-dedicated venture capital fund comes at a time when there is a sharp uptick in the venture funding scenario. With business models based on the Internet and cloud computing enabling entrepreneurs to build brilliant ideas into successful ventures, VC funds like Accel are aggresively rolling out plans. In addition to Accel, Aavishkar, IndoUS Venture Partners, IDG Ventures and Clearstone Venture are all raising India-dedicated venture funds totalling over $500 million cumulatively.
Accel Partners is embarking on the new VC fund even as it is parallely raising a $400 million India-dedicated growth capital fund. Investment banking officials indicate that Accel is aggressively looking at this space even as it is looking to expanding its venture capital business.
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The fund, during late 2009 hired Neeraj Bhardwaj as MD of the growth capital business in India and presently has a three member team manning this.
Accel Partners is coming in with an India-dedicated fund even as the private equity industry is swinging back to pre-recession levels. According to data from Venture Intelligence, a research service focused on private equity and venture capital, PE firms $7.9 billion over 325 deals in India during the 12 months ending December 2010, compared to a little over $4 billion across 290 deals during the previous year.
“After a volatile three-year period, PE investment activity in 2010 reverts to the levels of 2006 (which had witnessed 358 investments worth $7,485 million),” pointed out Arun Natarajan, CEO of Venture Intelligence.
“The really exciting feature of 2010 was on the exits side where activity vaulted to all time high levels with 121 transactions, including 24 via IPOs,” he added.