Accel reveals $305M fund earmarked for India

Steven Loeb · March 24, 2015 · Short URL: https://vator.tv/n/3cbe

Accel has been investing in India since 2005, putting money into Flipkart, Freshdesk and CommonFloor

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If you haven't noticed, the tech scene in India is kind of having a moment right now, with U.S.-based investors and companies taking big stakes in the growing country.

Now venture capital firm Accel Partners is getting ready to commit a whole lot of money to investing over there, announcing a new $305 million fund on Tuesday, called Accel India IV.

The money will be used to "invest in very early stage companies where we partner closely with India-based entrepreneurs to help build their businesses from the earliest days," Subrata Mitra, Partner at Accel, wrote in a blog post. "The fund will also continue to selectively pursue growth equity opportunities in the most promising technology companies in India."

Specifically, Accel will be investing in four different categories: consumer, enterprise software, mobile and healthcare businesses. 

The $305 million is almost double the size of the last fund Accel set aside specifically for Indian startups, a $155 million fund launched in 2011

The firm has been investing in the Indian tech scene for 10 years now, starting all the way back in 2005. Some of its investments have included participating in a $25 million round in online movie and events ticketing brand BookMyShow; a $10.4 million round in Indian real estate portal CommonFloor.com; participation in a $1 billion round in e-commerce company Flipkart; and a $31 million round in Freshdesk, a provider of cloud-based customer support software.

Accel has also seen some big exits, including online fashion retailer Myntra, which was acquired by Flipkart and TaxiForSure which was acquired by Ola.

"We’re excited about the entrepreneurial energy in India and we look forward to working with the next generation of business leaders.," Mitra wrote. :Accel’s deep local team of investment partners, our extended global network, and our in-house experts in critical areas like marketing, HR, technology, product management and product design, stand ready to help the next class of great technology companies from India."

Accel also has an office located in Bangalore, India.

VatorNews has reached out to Accel for more information about the new fund. We will update this story if we learn more. 

The Indian tech scene

There was a flurry of activity in India in the last year and chance.

Last year India became Uber's biggest non-U.S. market, and the company just this week partnered with, and took some money from, Times Internet to expand its presence even further. 2014 was also the year that Facebook hit the 100 million user mark in the country, giving it the second largest base of Facebook users in the world.

But mostly last year was all about India e-commerce, with huge investments and funding in that space.

Two companies in particular raised funding in the billions of dollars:  Flipkart, which is also the largest e-commerce company in India, raised nearly $2 billion in three rounds.

First it picked up a $210 million investment led by DST Global in May and then the aforementioned $1 billion round, led by Tiger Global and Naspers, in July. It raised another $700 million to close out the year.

Meanwhile, Snapdeal, which is one of Flipkart's biggest rivals, raised at least $860 million in four rounds in 2014. 

The first investment in the company was in a round led by eBay in February, in which it invested $133.7 million. The round also included Kalaari Capital, Nexus Venture Partners, Bessemer Venture Partners, Intel Capital and Saama Capital. That was then followed by another $100 million from Temasek, BlackRock, Myriad, Premji Invest and Tybourne in May, and then an undisclosed personal investmentfrom Ratan Tata in August. The company then added another $627 million from Softbank in October.

Both of those companies will have to deal with Amazon, which announced in July that it was going to be investing $2 billion in its Indian operations. 

2014 ended with News Corp. purchasing financial planning service BigDecisions.com, which followed News Corp's first investment in India in August, when it participated in a $37 million round for PropTiger, an online real estate marketing platform in India. In all, News Corp. acquired a 25% stake in the company.

2015 has seen some big moves in India as well, with Twitter acquiring Indian marketing and analytics platform ZipDial in January, and Google choosing India as the first international headquarters for Google Capital. The firm had already put an undisclosed amount of funding into CommonFloor in January.

(Image source: fineartamerica.com)

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CommonFloor creates online communities for residential properties like Apartments, Villas, Societies.