Accel Closes Oversubscribed $550M India Fund Within Weeks, Eyes AI Startups and Advanced Manufacturing

Accel closes oversubscribed $550M India fund within weeks, 19 months after its last

Accel has closed a new $550 million India fund, less than two years after raising its previous India-focused vehicle, as part of a coordinated $3.5 billion global fundraising effort. The new India fund was oversubscribed and closed within weeks, people familiar with the matter told TechCrunch. Accel still has more than 55% of its previous $650 million India fund available for investment, the people said, underlining that the latest raise came despite ample capital remaining in its earlier vehicle. The fundraising comes as Accel bets that India's next startup wave will be driven not only by AI, but also by consumer internet, fintech, and advanced manufacturing. The firm believes that artificial intelligence is becoming a horizontal technology that underpins each of those sectors rather than a standalone investment category. "There is a significant amount of money available in the market for early-stage investing in the categories we have always invested in -- AI, consumer, fintech, and now advanced manufacturing, and deep tech," Shekhar Kirani, a partner at Accel, told TechCrunch. "We will continue to invest, looking for the best of the best local winners, where we can make them into global successes." Accel is expected to begin deploying capital from the new fund in 2027, Kirani said. Until then, the firm will continue investing from its previous India fund, he added while declining to disclose how much remains. Accel's renewed commitment comes as global investors debate whether India can produce globally competitive AI startups after the country largely missed the first wave of foundation model companies. Accel sees India's opportunity specifically in building AI applications, infrastructure, and software aimed at enterprise and consumer use cases. "The early movers have been on the LLM [large language model] side... but there is a significant opportunity in the application layer," Prayank Swaroop, a partner at Accel, said. Accel expects Indian startups to build AI-powered applications and enterprise software on top of existing models rather than competing with OpenAI or Anthropic. Swaroop told TechCrunch that Indian startups are increasingly combining AI with the country's existing engineering talent and services expertise to solve enterprise problems, particularly in sectors where human oversight remains critical. Kirani echoed Swaroop and mentioned RapidClaims, an Accel-backed startup that automates medical coding for U.S. healthcare providers, as an example. The startup combines AI with domain expertise to deliver coding accuracy of about 95%, targeting a market that has traditionally relied on outsourced human labor in India and the Philippines. Barath Shankar Subramanian, a partner at Accel, said the firm's optimism is also being driven by the rapid adoption of AI among Indian consumers and businesses, creating a growing domestic market for AI-native products alongside globally focused software companies. The trend is already visible across leading AI companies. OpenAI and Anthropic have both identified India as their largest market outside the U.S., while AI coding platform Cursor recently said India has become one of its fastest-growing developer markets and its largest market for power users. Accel's fundraising comes as several global venture firms are renewing their focus on India despite a broader slowdown in venture capital. Peak XV Partners, the former Sequoia Capital India business, recently raised $1.3 billion across new India and Southeast Asia-focused funds, while General Catalyst has committed to deploying $5 billion in India over the next five years. Lightspeed Venture Partners is also said to be exploring a new $300-$350 million India-focused fund. Kirani said the renewed interest reflects a shift in the quality and ambition of Indian entrepreneurs. "Compared to several years back," he said, "the quality of ideas and quality of founders are significantly better than what we have ever seen." The new India fund was one of four funds Accel raised simultaneously for the first time, alongside dedicated U.S. and Europe funds and a $1.35 billion growth vehicle. The growth fund, Accel said, can back breakout companies emerging from any of its regional funds, including India, allowing the firm to continue investing from inception through IPO and beyond. Kirani told TechCrunch that the coordinated fundraising was driven by investor preference to evaluate Accel's global platform in a single process rather than through separate regional fundraises. Accel's investment philosophy, Kirani said, remains rooted in backing founders early rather than chasing later-stage trends. Accel writes the first institutional check in roughly 80% of the companies it backs, a strategy that has helped it invest early in companies including Flipkart, Swiggy, Freshworks, and Zetwerk.

Accel raises $3.5 billion to invest in emerging global AI startups

The firm, which has backed artificial intelligence companies including Anthropic, Cursor and Perplexity, has raised four separate funds dedicated to backing young startups in a moment when the AI race is upending the fundraising market. A $1.35 billion global expansion fund will be set aside for larger early-stage rounds and rapid follow-on investments; $800 million will target US investments, primarily in Silicon Valley; $800 million will be deployed in Europe and Israel; and $550 million in new funds will be invested in India. Accel, a global venture capital firm with offices in Silicon Valley, London and Bangalore, India, has raised $3.5 billion in new funds for early-stage investments across the world. The firm, which has backed artificial intelligence companies including Anthropic, Cursor and Perplexity, has raised four separate funds dedicated to backing young startups in a moment when the AI race is upending the fundraising market. A $1.35 billion global expansion fund will be set aside for larger early-stage rounds and rapid follow-on investments; $800 million will target US investments, primarily in Silicon Valley; $800 million will be deployed in Europe and Israel; and $550 million in new funds will be invested in India. "Companies raise more money, more quickly, earlier in their company life than ever before," said Accel partner Harry Nelis, who is based in London. "The exciting bit is that there's massive opportunities, but the scary bit, or the flip side, is we work with larger amounts and the risk is still pretty much the same." Nelis said Accel has kept its early-stage fund sizes relatively modest when compared with many other firms, but its global expansion fund will help it invest in some of the larger rounds by splitting the investment between a core fund and the later-stage vehicle. The firm's new India fund is $100 million less than its predecessor, but its Europe and US funds have both grown from $650 million to $800 million. Over the past two years, Accel has expanded its investments from AI-native startups across the application and infrastructure layer, into more deep tech sectors, from material science to manufacturing, according to Steve Loughlin, a firm partner who is based in the San Francisco Bay Area. Other VC firms have also been embracing the same kinds of investments, led by a conviction that AI can help renovate complex industries in ways that traditional software did not. Last year, Accel joined a $300 million seed round in an AI scientific discovery platform called Periodic Labs that valued the company at $1.3 billion. Periodic Labs is one of a handful of startups that have raised capital under the "neolab" umbrella, a type of nascent startup that accepts massive amounts of capital at inception to fund ambitious research projects. Other AI startups that have raised large seed rounds include Thinking Machines Lab, which was founded by former OpenAI chief technology officer Mira Murati and is an Accel portfolio company, and Safe Superintelligence Inc., which was started by former OpenAI co-founder Ilya Sutskever. "You can't really construct a fund of just those types of deals," said Loughlin, of billion-dollar seed-stage startups. The investor said that the vast majority of Accel's early-stage investments are in startups where it can get a meaningful ownership stake in exchange for its check. Part of Accel's pitch to AI entrepreneurs is its global footprint and how it can be used to help companies expand -- whether it's boosting a US startup's engineering resources in India, or wooing a founder based in Israel within hours because of a partner's proximity to the region. The firm is also attempting to build connections with the best Silicon Valley talent by launching a no-strings-attached, in-person residency program for aspiring founders that's located next door to its San Francisco office.The fundraising haul comes at a time of change for the firm, which was founded in 1983. One of its most prominent early-stage investors, Daniel Levine, who backed Scale AI and Vercel, will no longer make investments for Accel in this fund or future funds, an Accel spokesperson confirmed. Despite stepping back from his role, Levine remains a partner and will continue to serve on his board seats and support his existing investments. Additionally, the firm has accelerated its pace for its later-stage investments, recently raising $5 billion in capital for that purpose, as Bloomberg News previously reported.

Accel raises $550 million for India, keeps early-stage focus as AI reshapes dealflow

The Silicon Valley-headquartered VC firm is betting on India's IPO-led liquidity opportunity. Accel aims to invest early and help companies scale to $1-2 billion-plus businesses. Portfolio companies such as Zetwerk, Infra.Market, Acko, Curefit, and Spinny are among those in the pipeline to go public over the next year. Accel, an early backer of Flipkart, Swiggy, and Urban Company, has raised $550 million for its ninth India fund, about 15% lesser than its Fund VIII as the venture capital firm looks to continue to focus on investments in deeptech, manufacturing, and AI. It joins a list of large venture firms in India that have downsized their latest funds amid a reset in the industry due to fewer local opportunities in the artificial intelligence (AI) space.