Of the over 200 investments by venture capital firm Accel, 22 have emerged as unicorns, including 17 with seed or series A investments.
The unicorns in its kitty span segments such as direct-to-customer (D2C), business-to-business (B2B), and software-as-a-service (SaaS), and include names such as Swiggy, Urban Company, BrowserStack, Infra.Market and Zenoti, among others.
Banking on early identification advantage, Accel has been the first institutional investor in over 85 per cent of its funding in India and Southeast Asia, with 95 per cent of the investments made at the seed or series A round.
In a chat with BusinessLine, Prayank Swaroop, a partner at Accel, expressed optimism in the Indian market.
How much money have you raised till date?
From our inception, we have essentially raised close to $2.5 billion for India. We have invested in over 200 start-ups, excluding shutdowns and exits.
When was the latest fund launched, and which sectors are you interested in?
We are currently deploying the seventh fund, through which we raised $650 million in quarter one in 2022. (It’s) A purely sector-agnostic fund; we have invested across a range of sectors including travel tech, insure tech, SaaS, B2B marketplaces, logistics, crypto, Web 3.0, foodtech, health tech, edtech, D2C, and e-commerce, among others.
Every few quarters, we try to pick up areas where we think new things will happen. Currently we are excited about investments in artificial intelligence, tier-two start-ups. Our pre-seed initiative, Atoms, has partnered with 14 very early-stage start-ups in the first cohort, and another 10 in the second cohort.
How early do you enter? Do you take board seat?
We enter at pre-seed level, pre-revenue level, and go all the way up to growth-stage, late-stage. For early-stage companies, we may not take up seats until there’s a formal process in play. However, we keep some sort of oversight. We take board seat in companies that have reached a certain scale.
What is your average cheque size?
On the early side, our average cheque size would be $3–5 million, while on the late-growth side it would be $20–25 million.
What is your preferred form of exit?
We have seen 20-25 exits. Our largest exit has been Flipkart, being bought out by Walmart, and then the second big iconic exit for India was Freshworks IPO. We have also seen a fair share of secondary sales and M&As. Our most preferred exit route would be IPOs on the Indian stock market.
How has the funding winter impacted start-ups?
Funding winter is here, but it’s starting to become better. It might continue for another year or so for large rounds. For early-stage, it’s starting to come back. For India’s early-stage markets to behave properly, the late-stage investor interest is very important.