Rethinking Early-Stage Startup Investing in India with Accel
Accel, one of the top venture firms in India, is reevaluating its approach to early-stage startup investing. With a portfolio that includes nearly two dozen Indian unicorn startups, Accel has a proven track record of success. However, the partners leading the firm’s early-stage accelerator program, known as Atoms, are taking a reflective approach to their strategies. They recognize that all VC firms eventually look the same to founders and are focused on finding a unique path to success.
In recent years, VC firms in India have shifted their focus to making early-stage investments. This is driven by the realization that India is not producing many billion-dollar exits, so getting in earlier is crucial for improving returns. Accel has been searching for the right fit for its early-stage accelerator program for almost five years. Before launching Atoms, the firm explored building a repository of knowledge and community with SeedtoScale.
However, Accel quickly realized that they needed to take a different approach. They no longer try to facilitate mingling between Atoms portfolio startups and other investors. This was seen as artificial and put unnecessary pressure on the startups. They also discovered that many founders were uncomfortable engaging with peers who were more advanced in the industry. Accel decided to forge its own unique path based on these learnings.
So, what does this new path look like? The third cohort of Accel’s Atoms program features just eight startups, much smaller than other well-known accelerators. These startups all operate within two sectors: AI and Industry 5.0 (smart-manufacturing). Accel invests up to $500,000 in each startup’s pre-seed round, without any valuation cap. In addition to financial support, Accel helps these startups strategize and connect with potential partners and customers in their industries.
Let’s take a closer look at some of the startups in Accel’s third cohort:
Spintly: Spintly is an IoT platform that simplifies access control to buildings. Their distributed IoT architecture and edge computing technology eliminate the need for heavy infrastructure, allowing users to access doors with their smartphones. Spintly has already eliminated 200k plastic badges and 2k miles of wired infrastructure.
Asets: Asets has launched an AI-powered cloud-based Integrated Design Suite, which helps engineering companies accelerate their early-stage engineering by 10x. This multidisciplinary CAD, simulation, and engineering design platform streamlines processes and reduces costs.
Tune AI: Tune AI offers a GenAI stack for enterprises, including an AI chat app and a comprehensive solution for managing AI models. Their solutions have already gained traction, with over 180,000 users and a focus on data security and compliance.
Skoob: Skoob is a generative AI platform that revolutionizes how readers interact with books. Instead of navigating through entire volumes, Skoob dissects books into topic-centric sections, making knowledge consumption intuitive and user-friendly.
Arivihan: Arivihan is India’s first AI-based automated learning platform for school students. Their app provides personalized tutoring, exam planning, video lectures, instant query-solving, and knowledge validation.
Meritic: Meritic is a storytelling co-pilot for financial planning and analysis teams. Their platform automates reporting and business analytics, combining knowledge graphs and language models to provide qualitative insights and automate financial deck creation.
Accel chose AI and Industry 5.0 as the themes for Atoms because they believe these sectors will significantly grow in the next decade. Industry 5.0 is particularly promising as outdated plants in India and elsewhere are modernizing, creating opportunities for startups to bring efficiencies and compete with consulting firms. New Delhi’s push to attract foreign manufacturing firms to the country has also contributed to this industry’s growth.
Accel received over 800 applications for Atoms 3.0, with around two-thirds of the pitches focused on AI startups addressing HR and marketing challenges. However, Accel is looking beyond the noise in the market and seeking startups in other sectors.
Participating in Atoms has not only provided startups with capital and learning sessions but also a strong founder community and collaborative peer group. Startups like Meritic have found value in the Founder Anonymous sessions and GTM talks, which have helped shape their thinking and solutions.
Accel’s commitment to rethinking early-stage startup investing in India is evident in their unique approach with the Atoms program. By focusing on AI and Industry 5.0 startups, providing strategic support, and fostering a collaborative community, Accel aims to increase the odds of success for these early-stage ventures.