Accel, a prominent venture capital firm, has announced a strategic partnership with Prosus to jointly invest in early-stage startups across India. This agreement is a critical step forward. More importantly, Prosus is making its debut into the formation stage of the investment ecosystem with intentions to help dynamic young companies grow from infancy on up.
Accel’s debut in the seed and pre-seed round has a notable track record, having previously funded more than 40 startups through its early-stage program called Atoms. Over 30% of these startups have gone on to raise follow-on funding from third-party investors. More importantly, this achievement underscores the long-term promise of Accel’s investment strategy. To date, the firm has played a leading role in more than half of the follow-on funding rounds for these startups. This is further testament to its deep commitment to supporting their growth.
The collaboration with Prosus allows the two firms to jointly invest in new businesses. Together, they will prioritize sectors that address systemic issues in a big way. These opportunities range from automation to energy transition to internet services to advanced manufacturing. Prosus is coming on board in a big way to support this new effort by matching Accel’s investment in each company. They are jointly providing the first funding checks of $100,000 to $1 million. There’s room for these starting figures to grow soon as the collaboration matures.
India’s rapidly growing digital ecosystem provides an enticing canvas for this emerging synergy. With over a billion internet users and more than 700 million smartphone users, it stands as the second-largest smartphone market globally, following China. This rapid digital adoption has recently caught the eyes of global investors, thanks to India’s massive population and growing digital economy.
In September, a powerful coalition of eight U.S. and Indian VC and private equity firms—including Accel—joined forces. They pledged more than $1 billion to accelerate the expansion of deep tech startups in India. This $1.4 billion+ collective commitment is a testament to the immense and increasing faith in, and appetite for, the Indian startup ecosystem.
The Indian government has played a crucial role by introducing platforms such as the Unified Payments Interface (UPI) and Aadhaar. These efforts have established a strong digital infrastructure that allows startups to expand their services quickly.
Indy’s Pratik Agarwal has played an important role in this effort. He said that India needs to take advantage of its role in today’s global economy.
“India’s place in the global economy and the geopolitical system is such that India needs to chart and accelerate its path like a self-sovereign, independent, developed country,” – Pratik Agarwal.
Agarwal spoke to the value of this partnership in helping lead and accelerate the transition of the Indian startup ecosystem.
“We feel now the time is right for the Indian startup ecosystem to move from adapting global businesses to creating Indian models that help India leapfrog its journey in becoming a developed country,” – Pratik Agarwal.
Accel and Prosus are jointly increasing their support for India’s objective to build more homegrown solutions. These adequate solutions want to be competitive market–global competitors. Asst. Secretary Ashutosh Sharma captured this vision perfectly when he said technology is a “transformative force” in our industry.
“Because of this AI-led disruption that is happening around us, some countries will be disproportionate beneficiaries of this — and some countries will be disproportionate net losers,” – Ashutosh Sharma.
He offered more details on India’s emerging role within this paradigm shift.
“Two countries that seem very placed to be beneficiaries are the U.S. and China. Now in that world order, and in that world narrative, what is India’s space? And can India, therefore, as part of this ‘leap tech’ revolution, find the rightful place?” – Ashutosh Sharma.
The goal of the partnership is to direct more early-stage capital, including the first check, into high-quality, high-potential startups at formative stages of their development.
“Hopefully, we are bringing a lot more early capital to them at the right time so that they can make substantial progress without going through several rounds of false starts before they make progress,” – Pratik Agarwal.
The joint investment by Accel and Prosus is a notable sign of maturity in India’s startup ecosystem. It’s a testament to both firms’ dedication to creating and scaling new innovations and solving pressing challenges through investment.
“For us, getting that equity in the first round is not important at all. If we can truly identify a Swiggy, a Meesho, an iFood, or a Tencent of tomorrow — today — that is success enough,” – Ashutosh Sharma.
The collaboration between Accel and Prosus illustrates a significant development in India’s startup ecosystem. It reflects both firms’ commitment to fostering innovation and addressing pivotal challenges through investment.
