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Accel, the Silicon Valley venture capital firm that placed some of the earliest bets on Flipkart and Swiggy, is deepening its commitment to India as artificial intelligence reshapes how startups are built. The firm has raised $550 million for its ninth early stage India fund, part of a $3.5 billion haul across four new global vehicles, including a $1.35 billion growth fund to back companies from seed to initial public offering (IPO).
Accel has now raised $1.2 billion for India in 18 months, a record pace for fundraising at this scale in the country, even as war in the Middle East makes some global investors more cautious about committing fresh capital.
Shekhar Kirani, partner at Accel, says what’s different this time is that AI, unlike past technology waves, is arriving in India at the same moment it is arriving everywhere else.
Kirani said Accel raised Fund IX ahead of schedule, with Fund VIII ($650 million) still holding significant capital. He said the fund’s size reflects sufficient capital to support the ecosystem, not a smaller opportunity or a move to raise less than rivals.
“We have enough money to operate in the country,”Kirani told Business Standard.
Kirani said Accel is deploying capital at the same pace, with Fund IX expected to begin deployment next year and a “material” amount of Fund VIII still available. He said the $1.35 billion growth fund is a common pool for Accel-backed companies needing follow-on capital as they scale, including in India.
On how AI’s faster adoption changes the opportunity for Indian founders compared with earlier technology waves, another Accel partner Barath Shankar Subramanian said the approach hasn’t changed: “So get in early and stay long,” said Subramanian.
Accel is focusing on consumer, advanced manufacturing and fintech, with AI cutting across all three, including continued online adoption in metros, Tier 1 cities and Bharat, precision manufacturing, defence and space, and new AI enabled fintech use cases.
On Accel’s shift from consumer internet and SaaS toward advanced manufacturing and deep tech, another Accel partner Rachit Parekh identified two opportunities: India manufacturing for global markets, and strategic manufacturing within India. Parekh said this reflects India’s ability to win in certain categories and the need to diversify global supply chains. Portfolio companies such as Zetwerk, Simplify and Captain Fresh are already scaling globally. The second includes strategic sectors such as defence, with robotics another emerging opportunity. Accel is also taking longer term bets in deep tech, biotech and quantum, including Sarla Aviation, Fabheads Automation, Scimplify and Unmannd.
Asked how opportunities in sovereign sectors have changed for Indian founders, Parekh said government support is creating large new markets across defence, AI, space and other strategic sectors that have emerged recently and could become significant.
“There is an opportunity, massive market, and enough government support to get off the ground and start scaling,” said Parekh.
Parekh said programmes such as RDIF, TDB and iDEX give founders access to capital and government customers.
Some worry that global AI funding is concentrated in U.S. foundation model companies, leaving Indian startups short of capital. Kirani said the biggest opportunities lie beyond the large language model (LLM)layer, in applications and infrastructure. “The middle layer, as well as the application layer, are much bigger waves,” said Kirani.
Kirani said Accel is bullish on AI-first companies from India building vertical applications and infrastructure atop LLMs, regardless of whether the underlying models come from the U.S., China or elsewhere.
On whether AI native startups are scaling faster than Accel’s traditional fund cycle, Kirani said AI companies serving Indian and global markets are growing quickly because the technology automates workflows previously difficult to address.
“We have never seen this kind of a pool before,” said Kirani.
Kirani said Accel’s strategy remains unchanged as an early stage, first institutional cheque writer. Companies that once took 18 to 24 months to raise their next round now often do so within 12 months. Rapid growth is attracting more capital, faster.
Asked whether India could produce globally category-leading AI companies over the next decade, Kirani said he expects several to emerge, not just one.
“If you give a 10-year horizon, you will see a significant number of companies coming from this part of the world that would be very unique and own the categories,” said Kirani.
Kirani said AI has flattened technology’s traditional flow from West to East, giving Indian founders faster access to cutting-edge tools
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