Ace will invest $650 million in emerging Indian and Southeast Asian startup startups, making it the firm’s largest fund launch in the region. Sixteen years after its first fund collected $10 million, the global venture capital firm is launching its seventh specialized business fund in the sector – its largest yet.
Accel’s newest venture, like its previous funds, will focus on early-stage startup startups, with investments typically ranging from $1 million to $5 million in seed and pre-seed funding rounds at organizations looking to raise capital. The agency tends to invest sooner than other venture capitalists. In 87 percent of its investments, it has been the first institutional investor, and 95 percent of its investments are at the seed or sequence A level.
Prayank Swaroop, an Accel partner, says, “We’ve affected person buyers.” “We prefer to invest in businesses at the earliest possible stage to be in the best position to help them grow.”
Early-stage startup startups that have become household names, such as Flipkart and Freshworks, have been Accel investments in the region in the past. “Since Accel’s early days, our investment strategy has been grounded in the ready thinking — we investigate a specific technological shift, build a thesis, and when we come across a startup primed to succeed, we’re ready to partner quickly,” says Accel partner Prashanth Prakash.
Some of the funds’ portfolio companies are members of Accel’s SeedtoScale and Atoms programs, which are geared at full-fledged startup startups; in many cases, these businesses have little or no income – “some have hardly written a line of code,” adds Swaroop.
With this new fund, Accel is concentrating on businesses in Southeast Asia.
Although some investee companies are more established, Accel emphasizes the need to provide more than just financial assistance. “We believe our knowledge from the Indian market, combined with the global Accel platform, can assist startup startups in the region from seed to scale,” Swaroop says.
This is critical, especially as the Southeast Asian entrepreneurial ecosystem grows. According to recent research, 25 startup startups from six Southeast Asian countries will be unicorns in 2021, with a combined valuation of $55.4 billion. Between 2013 and 2020, just 21 businesses in the area had achieved unicorn status.
Accel’s funds’ geographic exposure has evolved in line with this trend; early funds invested almost entirely in India, while later versions were more diverse. According to Prakash, Accel anticipates its most recent launch to have a presence throughout the region.
“There’s no doubt that India has led the evolution of the startup sector in this region of the world,” he says, “but we’re now seeing it appear in other areas.” “While Singapore has a long history of entrepreneurship, Indonesia, Vietnam, and the Philippines are all experiencing something similar.”
In any event, rather than focusing on their native or regional market, most of the companies Accel invests in having an international appeal. This is especially true of Accel’s growing portfolio of technology companies, with business models like software-as-a-service making it easier for early-stage companies to sell to a global audience.
Accel’s funds have a special relationship with companies like these and companies that aren’t in the knowledge area but rely on it in the end. “What we do is based on expertise,” Prakash explains. “The start-startup ecosystem in Southeast Asia is thriving. Some of the most exciting innovation is happening right here; the concepts are unique to the region, but the startup startups have global ambitions.”
Accel sees its assistance, mentoring, and funding as critical to businesses seeking to realize their full potential. The agency is a successful convener of several startup startups, with founders sharing ideas and seeking help from one another. It also hires specialist consultants in recruitment, advertising, and sales to assist investee companies lacking skills or experience. It also connects these businesses with potential partners across its global network.
Swaroop explains, “We consider our group our secret sauce.” “There’s a wide range of experience and skills to leverage, ranging from recent college graduates to CEOs who’ve taken their firms public.”