When Amagi went public on January 21, it marked a rare moment for India's capital markets: a Bengaluru-based software company generating most of its revenue from overseas clients, built on proprietary technology rather than e-commerce or consumer services. For Accel, the venture firm behind the bet, it represents a 3.3-fold return in just over four years — and they're not selling. In a video interview with Peerzada Abrar, Shekhar Kirani and Rachit Parekh, the Accel partners who backed companies such as Freshworks, BrowserStack, and Swiggy, discuss why they see Amagi as a long-term hold, their AI investment thesis, and which portfolio companies might go public next. Edited excerpts:
Walk us through that investment thesis for backing Amagi: what did you see in cloud-based broadcast infrastructure that others might have missed?
Parekh: We invested in Amagi at the end of 2021. The main thesis is that we saw the shift from broadcast and cable TV to IP-led streaming TV. And essentially as the shift was occurring, the infrastructure was changing from on-premises, old school technology to cloud-based technology. And Amagi was the pioneer that had brought this technology to this industry. This was an industry in transition, which is what we as Accel love. Here was a company that has created a world class software and infrastructure for these media and entertainment industries to transition to the cloud and do everything from the content preparation, distribution and monetization. And they had managed to get some of the leading logos in the world as their customers. They have powered some of the largest events in the world with zero downtime. If you look at metrics their net retention is best in class almost 130 per cent.
Kirani: Consumers were buying new TVs and wanted streaming. And for the first time, instead of a cable company controlling, the consumers were in control of what they watch. Amagi had about $30 million ARR when we looked at them to where they are today.
And now with the IPO, what kind of returns are you looking at on this bet?
Kirani: We did a small sale in the OFS (offer for sale) to help with the IPO because all the mutual funds want enough size IPOs, so that they can get allocation. We know that we are already in the money at the current price. We are at 3.3 or 3.4 times of our invested dollars from the Accel India fund. So, we will hold and continue to compound because the market share they're playing is around 10 per cent. The remaining 90 per cent of the media and entertainment industry has yet to come to the cloud. So we're very, very early in the journey.
Are you seeing a meaningful reopening of the IPO window for tech companies in India, or is Amagi more of an exception?
Kirani: The India market is vibrant. There is enough appetite for high quality companies which are generating profitable growth. But Amagi in our mind is unique and special because it is one of its kind at this scale of revenue, a product-first company to be listed in India. In fact, this could be one of the largest IPOs of a technology-driven, software-driven, AI-first company listing in India, where the revenue streams are based on technology with global revenues from India. This is the largest product company to list in India.
Parekh: The Indian public markets have been resilient and largely driven by domestic inflows. This company is different from the other companies that have listed. Most of the other companies are focused on the Indian consumer market. This is much more software and IP focused, getting revenues from outside of India, primarily. One validation is the top three mutual funds are all buyers in the anchor.
Looking at your India portfolio, which other companies are on the IPO track in 2026-27?
Parekh: So this is our sixth company going IPO in the last, I would call it, a year-and-a-half or so. And we have multiple other companies which are at a very good scale and which are in the process of preparing. I don't think we want to share any more specifics because obviously a lot of this is confidential. But yes, there are multiple companies that are getting ready or figuring out the next steps in terms of a public listing.
Kirani: The public listing requires to have very good unit economics, very good scale, very good CFO and the financial infrastructure team, and very good audit capabilities. So we are preparing many of these companies to be at that level and at that scale. But having said that, going IPO is still not our call, it has to be the founder's call that they're ready and they can do it. Because once you IPO, you have to hold your position on your own for decades plus.
How are you advising portfolio companies on exits and when does an IPO make sense versus strategic sale or staying private longer?
Parekh: I think the IPO decision is very much a founder and founding team decision because the founder has to be ready for another marathon in some sense. Because once you go public, you're in the limelight. You have to deliver, your business model has to be a lot more predictable because you have to deliver every single quarter. Your team has to be ready. You have to up-level the team, the CFO, the controls, everything has to be up-leveled for a public company. And you have to have the market dynamics a little bit more stable in your favor before you go public.
Every VC says they're investing in AI. What does that actually mean for Accel in 2026-27? Are you backing foundation models, application layer companies, vertical AI solutions? And what's your specific thesis on where value will accrue in the AI stack?
Kirani: In India we're seeing vertical LLM (large language model) companies. We have been investing more in application layer AI companies which are sitting on top of the global LLM models — and building either workflows horizontally or vertically. Many of our funded companies have also become AI-first companies. If you look at many of our companies, they have at least 20-30 per cent of engineers doing AI products.
 "Amagi is likely one of India's largest tech-driven, AI-first IPOs: Accel")
