Leading venture capital Accel raises $650 million for its eighth India-focused fund

Accel, one of the most prolific investment firms in the world, has raised a record $650 million or around ₹5,500 crore for its eighth India fund, regulatory filing with the US Securities and Exchange Commission (SEC) showed on January 1.

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Additional capital will help the investor deepen its India focus, especially at a time when it is looking to back non-conventional companies building from non-metro cities.

Accel’s eighth fund is the same in size as the seventh which raised $650 million in March 2022. The investor has closed its latest fund a few weeks after two of its portfolio companies, Swiggy and Zinka Logistics went public. In fact, Swiggy’s $1.35 billion IPO was one of the largest for new-age companies since Paytm’s $2.4 billion public market debut in 2021.

Accel earned a whopping 35x return on its $20 million investment in Swiggy. Between 2015 and 2017, Accel participated in six consecutive rounds of funding, backing Swiggy as it doubled and quadrupled in valuation each time.

In all, Accel deployed around 6 percent of its $325 million fourth fund (Fund IV) into Swiggy. The Swiggy play is emblematic of Accel’s wider approach to early-stage investing. Accel’s IV fund, which invested in Swiggy, was a $325 million fund launched in 2015 and Swiggy alone returned over 1.5x the total fund.

Accel’s first check-in at Swiggy was at a valuation of less than $6 million. Nine years since, just the Swiggy bet alone has delivered nearly 200x returns for Accel, putting it in the rare league of early Flipkart returns.

Accel was the first VC firm to back Flipkart during its early days when the company was valued at a mere $4 million. The e-commerce company was sold to US retail major Walmart for $16 billion in 2018.

While most investors had sold their shares in Flipkart, Accel, unlike most other investors, had retained a small 1.1 percent stake even after the acquisition, only to fully exit the company in 2023. In entirety, Accel generated cumulative returns of around $1.5-2 billion, Moneycontrol had reported earlier, generating a whopping 25-30x return on total investment of $60-80 million over the years.

Apart from Flipkart and Swiggy, the investor has also backed other firms such as Urban Company, Acko Insurance, BlueStone and several others that are preparing to go public.