Have a strong pipeline of companies preparing to go public: Accel

India is on track to become an $8 trillion economy in 10 years and this will translate into growth in public markets, say Barath Shankar Subramanian and Abhinav Chaturvedi, Partners at venture capital

India is on track to become an $8 trillion economy over the next decade. This means the growth of the economy will naturally translate into growth in public markets, said Barath Shankar Subramanian and Abhinav Chaturvedi, Partners at venture capital firm Accel. In an interview with Peerzada Abrar, Subramanian and Chaturvedi said that public markets have begun embracing technology-led businesses. This was demonstrated by recent listings of Accel-backed firms like logistics company BlackBuck and food and grocery delivery platform Swiggy. The duo said many of Accel’s portfolio firms are preparing for public listings in 2025. Accel recently closed its latest $650 million fund, its eighth in India and Southeast Asia. With this fund, Accel  will continue to partner with founders in artificial intelligence (AI), consumer brands, fintech, and manufacturing. Edited excerpts: 

 

What long-term impact does Accel aim to make on India’s digital economy? 

 

Subramanian: We believe India is on track to become an $8 trillion economy over the next decade. Currently, digital and technology-led companies, including those backed by venture capital, account for approximately 5 per cent of the market cap in public markets. This figure is expected to grow significantly as existing companies scale further and new startups emerge to capture a substantial share of this expanding economic landscape. 

 

Which sectors excite you the most right now? 

 

Chaturvedi: Our investment strategy remains focused on four key sectors, and we intend to continue deepening our engagement within these areas. This includes consumer, which encompasses e-commerce and other consumer-focused businesses. The sector continues to present exciting possibilities as it evolves to meet the dynamic needs of Indian consumers. Then there is AI and software. We are particularly interested in software companies leveraging AI to create global businesses. We are looking at Make in India. With global supply chains shifting away from reliance on China (China Plus One strategy) and significant government initiatives to boost domestic manufacturing, this area offers immense potential. We see opportunities not just in serving the domestic market but also in supporting exports, positioning India as a global manufacturing hub. In the area of fintech, we are investing in innovative solutions tailored to meet the evolving financial needs of consumers.  

 

What are the new trends that Accel is seeing or exploring? 

 

Subramanian: In the consumer segment, we’re seeing some fascinating opportunities in what we refer to as 'Bharat' — essentially, Tier 2-and-beyond markets across the country. The first wave of consumer startups largely catered to the top 10-30 million people in India, focusing on their specific needs. However, we believe there is significant demand for goods and services in Tier-2 and Tier-3 cities, where consumers have similar needs but limited access to products and services typically offered by startups in Tier-1 cities. For instance, we’ve invested in City Mall, a company creating a grocery delivery platform specifically tailored for Tier-2 and Tier-3 towns. It functions in a way that mirrors quick commerce in Tier-1 cities but is uniquely designed to address the needs and economic dynamics of smaller cities. In manufacturing, we’ve observed significant evolution as well. One of the themes we are bullish about is India-to-global businesses. These are companies that leverage India’s position as a preferred sourcing and manufacturing destination due to the diversification of global supply chains. 

 

An example is Captain Fresh, which began as a B2B marketplace for fish and seafood with both supply and demand concentrated in India. Over the past two years, they have expanded their supply base beyond India to regions in the Global South, such as Indonesia, the Philippines, Vietnam, parts of South America, and Northern Africa. They are now catering to demand from the Global North, including the US and Europe, while retaining the supply chain efficiencies they developed in India. 

 

Another exciting area is Industry 4.0, particularly digital technologies transforming manufacturing and industrial operations. These technologies focus on enhancing factory floor operations to achieve higher-quality outputs, such as raw material grading, closed-loop process management, and sustainability improvements. A standout example is Detect Technologies, which uses video feeds in large industrial settings like oil and gas or manufacturing plants to identify safety issues, process deviations, and non-conformity to protocols. They work with major oil and gas companies in India, the Middle East, and the U.S., showcasing how digital solutions are driving transformation across industries. 

 

How do you view the quick commerce opportunity? Are you pursuing it aggressively? 

 

Subramanian: We are exploring it. From a consumer standpoint, quick commerce is about efficiently delivering goods and services to people. Being an insider in Swiggy Instamart has given us valuable insights into how this space is shaping up. We understand the dynamics of starting in this sector and scaling to build something substantial. Whether a particular category will succeed or not is something we evaluate carefully. 

 

Chaturvedi: We are actively involved in this space. Apart from Swiggy Instamart, we recently invested in Swish, a 10-minute food delivery business in Bengaluru. There’s been a noticeable shift in consumer behavior, with people expecting faster deliveries. This is a core underlying theme we’re exploring. The focus now is on understanding what the larger horizontal quick commerce players can do versus opportunities in specific verticals.  

 

Accel has seen success with IPOs like Swiggy and BlackBuck. What trends do you foresee in this area, and how is Accel positioning itself? 

 

Subramanian: The venture ecosystem in India began about 15 years ago, and now we are seeing the first and second waves of companies preparing to go public. We have a strong pipeline of companies currently in various stages of this process. One example already in the public domain is Bluestone, while several others are quietly making progress. 

 

About 10-15 years ago, there were big questions about whether VC-backed companies in India could successfully go public and how public markets would value them. That question has largely been answered. There is now a large pool of investors interested in these companies, and public markets are recognising their value. These companies have the opportunity to grow and compound further in public markets. 

 

To tie this to the broader context, as India’s economy moves towards the $8 trillion mark, public markets typically grow in tandem with GDP. Historically, there’s a correlation of 1:1 or even 1.3–1.4 between GDP growth and public market expansion. This means the growth of the economy will naturally translate into growth in public markets. Companies preparing to go public will benefit significantly from this trajectory.  

 

You were one of the early investors in Flipkart and Swiggy. Swiggy recently had a blockbuster IPO and Flipkart has also scaled up. What role have you played in their success?

 

Subramanian: In Swiggy’s case, for instance, we played a key role in hiring their CTO. We worked closely with the company to run the process and bring the right person on board. In Flipkart’s case, our partner, Subrata Mitra, who was on Flipkart’s board, was deeply involved in all the critical early hiring decisions. These are just two examples, and there are countless others. Most of these companies started as very small teams. For instance, when we invested in Swiggy, they were a 10-15 member team delivering only in Koramangala. None of these companies got to where they are today without facing ups and downs. Our philosophy has always been founder-first — helping them think through challenges and offering a different perspective when needed. For example, with Captain Fresh, we worked closely with the founders to think about how to scale globally when the domestic market proved tough. 

 

How has Accel’s investment thesis evolved over the past 10-15 years? 

 

Subramanian: There are three main areas of evolution. While inbound deal flow remains our primary source for identifying companies, we recognise the need to reach founders wherever they are. To address this, we’ve developed an internal software tool that helps us proactively identify potential founders and startups by analysing signals. A dedicated team of analysts supports this process, ensuring we don’t miss opportunities. 

 

When we started in India, we operated with a $60 million fund. Today, we manage a $650 million fund, which allows us to invest in companies for a longer duration and secure larger ownership stakes in breakout businesses. This scalability enhances our ability to support companies throughout their life cycle. 

 

We launched Atoms, a pre-seed program, to engage with founders at the very early stages. This helps us explore new areas that could evolve into major themes like fintech, manufacturing, or consumer markets. Atoms enables us to identify and work with founders quickly and effectively. 

 

Chaturvedi: While our core themes remain consistent, their specifics have evolved. For example, 10 years ago, e-commerce was largely horizontal, with companies like Flipkart addressing broad market needs. Over time, it expanded to include verticals like food delivery with Swiggy. Now, we’re seeing a shift towards Tier 2-and-beyond markets. The idea is to continuously adapt to these changing trends, identify emerging stories early, and partner with companies early on.

 

Are there any specific changes or improvements in government policies that you believe could further support the startup ecosystem and drive greater innovation in the country? 

 

Subramanian: If you roll back to where we were a decade ago compared to now, there has been significant progress. A lot of effort has shifted from a top-down structure to building public digital goods and infrastructure. Continuing to invest in this area is crucial as it directly impacts the ease of doing business and enables companies to build and scale faster. In my view, this is a very important aspect. The second area is the growing trend of companies targeting global markets from India. While we’ve already seen a wave of SaaS companies, this trend is now expanding into B2B, particularly in manufacturing and AI. Focusing on improving the ease of doing business on a global scale should also remain a priority. This will help companies evolve and scale better in international markets. 

 

What challenges do startups face when scaling globally, and how does Accel support them? 

 

Chaturvedi: Startups require support across several key areas. First, we assist with strategic decision-making, helping founders evaluate multiple options and choose the most effective path. Second, talent acquisition is critical in the early stages, whether it involves hiring locally in India or globally. We play an active role in this, from interviewing candidates to pitching the company to attract the right talent. Third, we help with follow-on financing, as most companies require additional rounds of funding beyond the initial investment. We facilitate this by bringing in more capital and ensuring the business is positioned for sustained growth. 

 

In the early stages, challenges tend to be tactical, such as finding infrastructure or optimising customer acquisition efforts. For example, some of our portfolio companies use our launchpad, a co-working space, to address their workspace needs. As companies grow, challenges become more strategic, like building an independent board for a public listing or evaluating acquisitions. These challenges evolve with the company’s lifecycle, and our role adapts accordingly to address both the immediate and long-term needs of the businesses we partner with. Our ultimate aim is to help them scale effectively, both within India and globally.