Accel, Prosus form new partnership to back early-stage Indian start-ups
What's the story
Leading investors Accel and Prosus have announced a new investment partnership to support early-stage Indian start-ups. The collaboration, which was announced on Monday, is the first time that Prosus is investing at the formation stage. The two firms will co-invest from a start-up's earliest days, focusing on companies tackling systemic challenges across automation, energy transition, internet services, and manufacturing sectors.
Growth potential
India's digital economy is growing rapidly
India, the most populous country in the world with over 1.4 billion people, is witnessing rapid growth in its digital economy. The country has over a billion internet users and more than 700 million smartphone users, making it the world's second-largest smartphone market after China. Government-backed platforms like Unified Payments Interface (UPI) and Aadhaar have created a digital infrastructure that allows start-ups to build and scale services quickly.
Strategic shift
Addressing large-scale domestic challenges
Despite the growth of India's start-up ecosystem, most activity has been focused on adapting global business models. The Accel-Prosus alliance hopes to change that by investing in companies that are addressing large-scale domestic challenges. The partnership expands Accel's early-stage founder program, Atoms X, which was launched in July to support "leap tech" start-ups working on large-scale, systems-driven problems.
Investment strategy
Prosus to match Accel's investments
Under the partnership, Prosus has agreed to match Accel's investment in each company, with initial checks ranging from $100,000 to $1 million."We could both continue to do our own things in this space, but given how large the ambition is with these founders and how difficult a problem they are trying to solve, it made all the sense for us to put our resources together," said Ashutosh Sharma of Prosus.
Investment focus
Shifting focus to early-stage investments
Traditionally, Prosus has focused on late-stage investments globally. However, with this partnership, the Amsterdam-headquartered firm is now looking at early-stage investments. "For us, getting that equity in the first round is not important at all," Sharma said. "If we can truly identify a Swiggy, a Meesho...that is success enough."
Program success
Accel has backed over 40 start-ups already
Accel has already backed over 40 start-ups through its early-stage program, Atoms. Over 30% of them have gone on to raise follow-on funding from external investors, with Accel itself leading over half those rounds. Despite a 25% year-on-year (YoY) decline in VC funding in India to $4.8 billion during H1 2025, the country remains a key focus for global investors due to its large population and expanding digital adoption.