Accel rethinks early-stage startup investment in India | Tech Crunch

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By any benchmark, Accel is one of the top venture firms in India. With nearly two dozen Indian unicorn startups, including several category leaders, Accel's track record speaks for itself. Still, the partners leading the firm's early-stage accelerator program, called Atoms, are remarkably introspective about the changes they're implementing to improve their practices and odds of success.

“A fundamental belief we have is that at some point, all VC firms look the same to entrepreneurs. It's just money,” Priyank Swarup, a partner at Accel, said in an interview.

All VC firms have also focused more on early stage investments in India in recent years and finding the next Flipkart at the seed stage. This shift is primarily driven by the realization that India is not generating many billion-dollar exits, making it imperative for VC funds to get in early to dramatically improve their returns.

Accel has been trying to find the right fit for its early-stage accelerator program for nearly half a decade. Before launching Atoms, the venture firm explored building a knowledge base and community repository with Seedtoscale, which it continued to build.

“We've done demo days, we're trying to be on par with most other funds,” says Swarup.

As fast as Axel tried, it also ran backwards in some of its steps. For example, it will no longer seek to initiate combinations between Atoms portfolio startups and other investors. Swarup recalls a conversation with a founder who told him how the investor-meeting felt like putting the startup on a treadmill to artificially impress other potential backers.

Another clear feedback from entrepreneurs is that many of their peers in the industry can't keep up with their predecessors. “We're trying to find our own unique way, and what's worked for some other companies, we don't think it's going to work for us,” he said.

So here's what that path looks like. Atom's third cohort consists of just eight startups, notably smaller than other popular accelerators. And all the selected startups work in two areas: AI and Industry 5.0 (smart-manufacturing.)

Accel will invest up to $500,000 in a selected startup's pre-seed round and has no valuation cap. Besides helping a startup strategize, Accel also helps them meet industry players who could become potential partners and customers in the future.

More on this soon, but first, Accel's third cohort:

Spintly
Spintly is an IoT platform that facilitates access control for commercial and residential buildings. Unlike traditional systems, Spintly uses a distributed IoT architecture and edge computing technology that eliminates the need for heavy back-end infrastructure and allows users smartphone-based door access. Spintly has removed 200k plastic badges and 2k miles of wired infrastructure from the built world and currently serves 300+ customers and 4k+ doors.

assets
Canada-based Assets has launched an AI-powered, first-of-its-kind cloud-based integrated design suite, a multidisciplinary CAD, simulation and engineering design platform to help engineering procurement construction (EPC) and end-owner companies accelerate their startups. -Stage engineering by 10x. Customers benefit from rapid deployment of engineering resources, reducing effort time and costs associated with engineering projects.

Tune AI
Tune AI is a GenAI stack for enterprises with Tune Chat, an AI chat app with over 180,000 users, and solutions that include powerful models for text, code generation, and brainstorming. Managing the Gen AI model lifecycle and enabling data security with enterprise-grade compliance.

Scoob
Scoob is a generative AI platform that will revolutionize the way readers interact with books. Instead of navigating through entire volumes, we use the power of AI to break down books into topic-centric sections. We make knowledge consumption intuitive and user-friendly.

Arivihan
Arivihan is India's 1st AI-powered 100% automated learning platform, providing every special school student with a personal tutor at ₹300 per month in their pocket, guiding them in planning for their exams, teaching them with video lectures, talking to them, solving their questions instantly and solving them as desired. Validate their knowledge by testing and improving them at speed.

Meritic
Meritic is a storytelling co-pilot for financial planning and analysis (FP&A) teams to automate reporting and business analytics. Meritic combines the power of knowledge graphs and linguistic models to perform highly contextual analysis, gather qualitative insights, generate relevant interpretations, and automate financial deck creation.

(Two startups in the group are currently in stealth mode.)

Accel has chosen AI and Industry 5.0 as themes for Atoms because the firm believes these two areas will loom large over the next 10 years, said Bharat Subramanian, Atoms' leading partner.

Subramanian said Industry 5.0 has emerged as a key theme as ancient plants in India and elsewhere are finally being modernized, paving the way for startups that bring the potential to tap into the tens of billions of dollars that flow to consulting firms and others every year. Industry. “These factories generate a lot of data, but until now it has not been used,” Subramanian said.

The industry has also benefited from New Delhi's push and incentives to attract foreign firms to expand their manufacturing bases in the country and the growing 'China + 1' shift among global giants.

More than 800 startups have applied in Atoms 3.0 and around 300-400 applicants are AI startups. About two-thirds of all pitches focused on AI startups trying to solve HR and marketing problems, Swarup said. “There's a lot of noise in the market, and that's a sign we should hunt elsewhere,” he said.

“Beyond capital and learning sessions, being part of Atoms has given us a strong entrepreneurial community and a highly collaborative peer group – for example, we can turn to other teams at Accel LaunchPad when faced with a Meritic challenge. Operate now or reach out to anyone in the Accel network of over 200 portfolio company founders for a solution,” Meritic co-founder and CEO Pallavi Chakraborty said in a statement.

“Founder Anonymous sessions helped us open up the collective in a filtering manner, and GTM discussions were critical in shaping our B2B sales mindset.”



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