Accel launches $650 million India Fund VIII to power nextgen startups

The U.S.-based venture firm Accel has secured $650 million for its early-stage India Fund VIII as part of its expansion strategy to support the next generation of startups. The new fund follows the closing of Accel's 7th India fund in March 2022. Accel has successful investments in its portfolio, including Flipkart, Swiggy, and Freshworks.

"The startup ecosystem in India has reached a critical inflection point. India's GDP is expected to be approximately $8 trillion over the next decade, fuelled by rising incomes, digital adoption, and sustained investments in public infrastructure. This growth opens new doors for entrepreneurs to build solutions with global relevance while addressing local challenges—and we can’t wait to meet them," Accel says in a statement.

With its Fund VIII, Accel aims to back founders operating across artificial intelligence; those catering to the top 30% of households in India’s tier 2+ regions; and fintech.

Accel says India’s benchmark equity index Nifty 50 has tripled over the past decade, and public markets are embracing technology-led businesses. "Companies like BlackBuck and Swiggy, where Accel was an early backer, are recent examples of creative and relentless founders and what’s possible when innovation meets execution," the company says.

Venture-backed companies currently represent less than 5% of India’s market capitalisation. Accel says the opportunity ahead has never been bigger. "Over the past 16 years, we’ve supported companies that have reimagined industries—from e-commerce and SaaS to manufacturing and logistics. With our early partnerships in companies like Acko, BlackBuck, BrowserStack, Flipkart, Freshworks, Swiggy, UrbanCompany, and Zetwerk, we’ve had the privilege of watching them grow into category leaders."

Indicating a shift towards fewer, larger funding rounds, India's startups received $5.32 billion across 540 funding rounds in H2 2024, a growth of 8% from H2 2023 where $4.92 billion was raised across 890 rounds, but 22% lower than the $6.81 billion raised from 1,210 rounds in H2 2022, according to Tracxn data. India ranked third in global funding, after only the U.S. and the U.K., ahead of China and Germany.

The latest available VC funding data shows a total of 984 venture capital (VC) funding deals were recorded during January-October 2024, which was a year-on-year (YoY) improvement of 5.8% in deal volume. The total disclosed funding value of these deals jumped by 44.4% YoY to $9.2 billion during the same period, the data by U.K.-based data and analytics company GlobalData shows.