Accel's $650 mn India fund to focus on AI, fintech startups, manufacturing

One of the opportunities identified by Accel under the consumer theme is 'Bharat', where startups cater to the top 30 per cent of households in India's Tier-2+ regions

Accel, the venture capital firm, said its latest $650 million fund, its eighth in India and Southeast Asia, will focus on partnering with early-stage founders to build disruptive and category-defining businesses that create meaningful impact.

 

With this fund, Accel, which has backed startups like Flipkart and Swiggy, will continue to partner with founders in artificial intelligence (AI), consumer brands, fintech, and manufacturing. The firm has identified sub-categories of focus within each of these themes.

 

These include ‘Enterprise AI’—platforms that enable enterprise AI use cases using agentic technologies, large language models (LLMs), and small language models (SLMs). Another focus is 'Services-as-Software', where AI startups leverage India's large IT services capabilities to provide better automation offerings. Additionally, ‘Vertical AI’ focuses on startups tapping into India’s AI talent pool to integrate AI into vertical-specific use cases.

 

 

In the consumer segment, Accel will target ‘Bharat’—startups catering to the top 30 per cent of households in India’s Tier-2+ regions. It also includes ‘India Native’ firms, addressing the growing demand for higher service levels among Indian consumers, and 'aspirational brands', which aim to capitalise on Gen Z's increasing discretionary spending.

 

“We continue to adopt a ‘prepared mind’ approach, thoughtfully identifying thematic areas with significant potential for the next decade and beyond. This involves developing detailed investment theses around opportunities we believe will have an impact in India’s domestic and global markets,” said Barath Shankar Subramanian, Partner at Accel, in an interview. “We also maintain a founder-first approach. Around 80 per cent of our investments have been as the first cheque into companies, and we will continue supporting founders from the very beginning. Additionally, we leverage our global platform to collaborate with colleagues in London and Silicon Valley, bringing in best practices, identifying top teams, and scaling these companies effectively in India and globally,” Subramanian added.

 

Industry 5.0

 

In the fintech space, Accel’s new fund will focus on wealth management companies catering to affluent consumers seeking personalised wealth advisory services through digital channels. It will also invest in ‘fintech infrastructure’, enabling banks and fintech firms to deliver top-tier digital experiences for consumers and businesses. Additionally, Accel will back ‘digital distribution’ startups that accelerate financial product distribution by leveraging India's digital public infrastructure.

 

In manufacturing, Accel will target companies addressing global demand for diversified supply chains. This includes ‘India Native’ startups focused on high-quality production and IP-driven, value-added manufacturing. It will also invest in Industry 5.0 firms using next-generation digital technologies to transform factory floors, leading to efficient operations, higher-quality output, and sustainability.

 

The size of the eighth fund matches the $650 million raised in the seventh round in 2022. With this round, Accel’s total investment commitment in India will reach nearly $3 billion.

 

“One of our unique strengths is the continuity of our team. We’ve had no major disruptions, and we’ve successfully built and grown talent from within,” said Abhinav Chaturvedi, Partner at Accel. “This continuity allows us to capture opportunities in the Indian market effectively. We have a strong pool of younger talent coming up, and we’re excited about being the most preferred partner for founders over the next decade,” Chaturvedi added.

 

$8 trillion economy

 

Most economic projections expect India to remain a secular long-term growth story. As the fastest-growing major economy globally, India’s GDP per capita is projected to rise by 60 per cent, from $2,700 in 2024 to $4,300 by 2029, Accel said. The firm expects India’s robust consumption story and investments in public and digital infrastructure to sustain long-term economic growth.

 

“We believe India is on track to become an $8 trillion economy over the next decade. Currently, digital and technology-led companies, including those backed by venture capital, account for approximately 5 per cent of the market cap in public markets,” Subramanian said. “This figure is expected to grow significantly as existing companies scale further and new startups emerge to capture a substantial share of this expanding economic landscape.”

 

Public markets have begun embracing technology-led businesses, demonstrated by recent listings of Accel-backed firms like logistics company BlackBuck and food and grocery delivery platform Swiggy. Accel was the seed investor in both companies.

 

“Digital adoption is accelerating across urban and rural India, and founders are poised to solve real-world challenges and create globally relevant solutions,” said Prayank Swaroop, Partner at Accel.

 

IPOs

 

Accel has made significant investments in firms such as Amagi, Acko, BlueStone, BrowserStack, Cult.fit, Urban Company, and Zetwerk. The venture capital firm is the first institutional investor in 80 per cent of its portfolio companies. Many of these firms are preparing for public listings in 2025.

 

According to Shekhar Kirani, Partner at Accel, India’s startup ecosystem is driving the nation’s economic progress, with venture capital-backed companies surpassing $50 billion in public market capitalisation. “Indian founders have built resilient and enduring businesses embraced by public markets,” Kirani said. “As India’s GDP and public market cap grow, we expect large outcomes from disruptive businesses led by bold founders.”

 

Accel earned 35x returns on its investment in Swiggy's $1.35 billion initial public offering (IPO). In total, Accel invested about $75 million in Swiggy.