Accel and Prosus Invest in Indian Startups

New Investment Partnership Targets Indian Startups

Renowned investment firms, Accel and Prosus, have initiated a collaborative investment venture. This partnership is designed to provide funding to Indian startups right from their inception, focusing on founders who are developing solutions with broad reach within the South Asian nation.

First-of-its-Kind Collaboration for Prosus

The alliance, revealed on Monday, signifies Prosus’ inaugural investment at the formation stage of a company. Both organizations will jointly invest in startups from their earliest phases, prioritizing those that address significant challenges in areas like automation, the shift to sustainable energy, internet-based services, and the manufacturing sector.

India's Expanding Digital Landscape

India, now the world’s most populous country with a population exceeding 1.4 billion, is experiencing substantial growth in its digital economy. With over a billion internet users and more than 700 million smartphone users, it represents the second-largest smartphone market globally, trailing only China.

Government-supported platforms, such as the Unified Payments Interface (UPI) and Aadhaar, have established a robust digital infrastructure. This infrastructure empowers startups to rapidly build and expand their services. However, a considerable portion of India’s startup endeavors have historically centered on adapting existing global business models, with fewer ventures tackling large-scale, uniquely domestic issues. The Accel-Prosus partnership aims to rectify this trend.

Expanding Accel’s Early-Stage Program

This partnership builds upon Accel’s existing early-stage founder program, Atoms X, which was launched in July. Atoms X is dedicated to supporting startups focused on what the firm terms “leap tech” – companies tackling large-scale, systemic problems.

A Shift Towards Indigenous Innovation

“The current moment is opportune for the Indian startup ecosystem to transition from replicating global businesses to creating distinctly Indian models,” stated Pratik Agarwal, a partner at Accel, during an interview. “These models will facilitate India’s accelerated progress towards becoming a developed nation.”

Addressing Early Capital Challenges

Agarwal further explained that startups focused on solutions impacting large populations often encounter difficulties securing sufficient early-stage funding. This is due to the extended timelines required for these ventures and the potential for significant equity dilution before achieving substantial progress.

“Our goal is to provide substantial early capital at the appropriate time, enabling these startups to make meaningful advancements without facing multiple rounds of unsuccessful attempts,” he conveyed to TechCrunch.

Investment Details and Commitment

As part of this partnership, Prosus has pledged to match Accel’s investment in each company. Initial investments will range from $100,000 to $1 million, with the potential for increased funding over time.

Synergistic Resource Allocation

“While we could independently pursue opportunities in this area, the ambitious nature of these founders’ visions and the complexity of the challenges they address make it logical to combine our resources,” explained Ashutosh Sharma, head of India ecosystem at Prosus.

Prosus’ Evolving Investment Strategy

Traditionally, Prosus has concentrated on late-stage investments on a global scale. The Amsterdam-based firm’s key Indian investments include Swiggy, Meesho, and PayU.

Focus on Long-Term Value Creation

Sharma clarified that while Prosus is committed to matching Accel’s investment, it is not prioritizing an equivalent equity stake. “Our primary objective is to identify groundbreaking companies like Swiggy, Meesho, iFood, or Tencent at an early stage,” he told TechCrunch. “Achieving that identification is success in itself.”

Recent Co-Investments

The partnership has already led to co-investments in startups such as Arivihan, an AI-powered tutoring platform, and Wiom, a provider of affordable internet services.

India’s Role in the AI Revolution

“The current wave of AI-driven disruption will disproportionately benefit certain nations, while others may fall behind,” Sharma noted. “The U.S. and China appear well-positioned to capitalize on this trend. Within this context, the question becomes: what role will India play? Can India leverage this ‘leap tech’ revolution to secure a prominent position, not only in AI but across various sectors?”

Geopolitical Factors and Investment Strategy

This alliance emerges amidst increasing geopolitical instability, which has disrupted capital flows, technology supply chains, and market access. This has prompted global investors to reassess where capital can be deployed securely and at scale. India, with its large domestic market, expanding digital infrastructure, and growing pool of skilled technical talent, is increasingly viewed as a strategic priority.

India’s Path to Self-Reliance

“India’s position in the global economy and geopolitical landscape necessitates a focused and accelerated path towards becoming a self-sufficient, independent, and developed nation,” Agarwal emphasized to TechCrunch.

Accel’s Track Record in Early-Stage Funding

Accel has already invested in over 40 startups through its Atoms program. More than 30% of these startups have successfully secured follow-on funding from external investors, with Accel leading over half of those subsequent rounds.

Trends in Venture Capital Funding

According to Tracxn, venture capital funding in India decreased by 25% year-over-year to $4.8 billion in the first half of 2025. Late-stage deals experienced a 27% decline to $2.7 billion, while early-stage funding fell by 16% to $1.6 billion.

Continued Investor Interest in India

Despite the recent decline in funding, India remains a key focus for global investors, driven by its substantial population and increasing digital adoption. In September, a coalition of eight U.S. and Indian VC and private equity firms – including Accel, Blume Ventures, Celesta Capital, and Premji Invest – committed over $1 billion to support deep tech startups. The Accel-Prosus partnership exemplifies the ongoing commitment of global VCs to long-term investments in India.