Swiggy and Flipkart-backer Accel raises $650M for 8th India-focused fund
What's the story
Accel, a top global investment firm, has raised $650 million for its eighth India-focused fund.
The news was revealed in a regulatory filing with the US Securities and Exchange Commission (SEC) today.
The new capital infusion will allow Accel to broaden its investments in India, especially in innovative companies coming out of non-metro cities.
Track record
Previous fund and recent successes
The size of Accel's latest fund is the same as its seventh fund, which raised $650 million back in March 2022.
The closure of this new fund comes just weeks after two companies from Accel's portfolio—Swiggy and Zinka Logistics—made their public debuts.
Notably, Swiggy's initial public offering (IPO) was one of the biggest for new-age companies since Paytm's market debut in 2021.
Strategy
Investment strategy and returns
Accel's Swiggy investment, which returned 35x on its $20 million investment, epitomizes its early-stage investing strategy.
From 2015 to 2017, Accel invested in six back-to-back funding rounds for Swiggy as the company's valuation kept rising.
This one investment in Swiggy has given Accel nearly 200x returns over nine years, putting it on par with early Flipkart returns.
Future prospects
Accel's successful Flipkart investment and future plans
Notably, Accel was the first venture capital firm to back Flipkart when it was valued at just $4 million.
The e-commerce company was later sold to US retail giant Walmart for $16 billion in 2018.
While most investors sold their shares post-acquisition, Accel retained a small stake till 2023, generating cumulative returns of around $1.5-2 billion from its total investment over the years.
Market dynamics
Accel's portfolio and the current VC landscape
Apart from Flipkart and Swiggy, Accel has also invested in other companies such as Urban Company, Acko Insurance, BlueStone, and a few others gearing up for public listings.
The closure of its latest fund comes at a time when venture capital firms have billions of Dollars in undeployed capital.
A91 Partners is also raising roughly $700 million in its largest fund yet, as investors double down on India's thriving start-up ecosystem.