Renowned venture capital firms Accel and Prosus have unveiled a landmark investment alliance designed to nurture Indian startups from the very inception of their entrepreneurial journey. This initiative, focused on empowering visionary founders who aspire to create scalable solutions capable of serving India’s vast population, represents a decisive step toward strengthening the country’s innovation-driven economy. The partnership, officially announced on a Monday, signifies a pivotal transformation for Prosus, which, for the first time in its history, will participate in investments at the formation stage of newly established ventures. Together, the two firms intend to co-invest right from a startup’s earliest days, concentrating their efforts on enterprises tackling systemic and foundational challenges across strategically vital sectors, including automation, sustainable energy transition, internet infrastructure, and advanced manufacturing.
In recent years, India—now recognized as the world’s most populous nation with a population exceeding 1.4 billion—has experienced an unprecedented acceleration in the expansion of its digital economy. With over one billion internet users and a staggering 700 million smartphone owners, India occupies the position of the world’s second-largest smartphone market, surpassed only by China. The country’s remarkable digital ecosystem has been further strengthened through government-led innovations such as the Unified Payments Interface (UPI) and Aadhaar. These digital public platforms have created a robust and inclusive infrastructure, enabling entrepreneurs to design, deploy, and scale services at a remarkable pace. Nevertheless, despite these advancements, much of India’s startup activity has, until recently, focused on adapting business models initially conceived in mature global markets. Only a limited number of new enterprises have undertaken the more complex and ambitious task of addressing India’s own large-scale structural and social challenges. The collaboration between Accel and Prosus is intended to shift this paradigm—channeling resources into ventures that originate within the Indian context and aim to uplift the population at scale.
This strategic alliance will also expand the reach of Accel’s early-stage founder initiative, known as *Atoms X*, introduced in July as a means to propel so-called “leap tech” startups—companies dedicated to solving highly technical, system-level problems capable of transforming entire industries. In an interview, Pratik Agarwal, a partner at Accel, emphasized that the current moment offers a unique opportunity for India’s entrepreneurial ecosystem to evolve beyond its historical dependence on imported models. According to Agarwal, the time is ripe for the creation of inherently Indian business frameworks that could enable the country to leapfrog traditional developmental milestones and accelerate its trajectory toward becoming a fully developed economy. He also noted that startups developing population-scale innovations often encounter severe funding constraints at the seed stage. These ventures, typically characterized by long gestation periods and substantial early costs, are prone to heavy equity dilution before achieving sustainable traction. The new investment model, he explained, aims to provide such teams with crucial early capital—arriving at the right juncture—to allow meaningful progress without the inefficiencies or repeated setbacks that many early entrepreneurs face.
Under the terms of the partnership, Prosus has pledged to match Accel’s investment in every selected company. The firms’ initial investments, ranging between $100,000 and $1 million per startup, may expand as promising ventures progress and demonstrate viability. Ashutosh Sharma, who leads Prosus’s India ecosystem initiatives, remarked that while both firms could continue to pursue independent investment activities, the scale and complexity of problems these founders are working to solve make collaboration a far more effective strategy. Pooling knowledge, expertise, networks, and financial resources will, in his words, not only strengthen individual startups but also elevate India’s broader innovation landscape. Historically, Prosus has focused on late-stage, growth-focused investments across the globe and maintains a significant presence in India through its backing of prominent companies such as Swiggy, Meesho, and PayU. However, Sharma clarified that Prosus’s participation in this early-stage program is not motivated by an immediate desire to acquire equivalent equity stakes. Rather, its goal lies in identifying and fostering the emergence of transformative companies—potentially the next Swiggy, Meesho, iFood, or even the future Tencent—long before they reach global recognition. The satisfaction, he underlined, lies in the discovery and early cultivation of tomorrow’s industry-defining innovators.
Beyond formal investment terms, the collaboration marks a qualitative deepening of both firms’ existing engagement with India’s technology ecosystem. In recent months, Accel and Prosus have already co-invested in ventures such as Arivihan, an AI-powered educational platform that provides intelligent tutoring solutions, and Wiom, an emerging low-cost internet provider bringing affordable connectivity to previously underserved communities. Sharma observed that the ongoing wave of AI-led transformation has the potential to destabilize global economic hierarchies and redistribute technological advantage among nations. In this rapidly shifting world order, he argued, certain countries—most notably the United States and China—are currently positioned to benefit disproportionately. For India, the crucial question is to define its role and ensure it does not remain a peripheral participant in this technological divide. Through initiatives like the “leap tech” partnership, both Accel and Prosus seek to position India as an active and influential contributor to the next era of global innovation—not solely within the AI sphere, but across a broader spectrum of advanced technologies.
The alliance is also unfolding against a backdrop of heightened geopolitical uncertainty, which has disrupted international capital flows, supply chains, and technology access across multiple regions. As global investors reevaluate safe and scalable destinations for their capital, India’s large domestic market, maturing digital infrastructure, and growing reservoir of engineering and scientific talent are increasingly reinforcing its status as a strategic investment frontier. Agarwal reiterated that India’s future economic standing depends on its ability to forge an independent development path—one that prioritizes self-sufficiency while maintaining global competitiveness. Accel’s existing portfolio already reflects confidence in this evolution: through its broader Atoms initiative, the firm has backed over 40 early-stage startups, more than 30 percent of which have successfully attracted follow-on investments from external financiers, often with Accel continuing as a lead investor in subsequent rounds.
Despite a recent downturn in venture capital inflows—where funding declined by 25 percent year-over-year to $4.8 billion in the first half of 2025, with notable reductions across both late-stage and early-stage financing—India remains at the forefront of investor interest. The country’s demographic advantage and rapidly expanding digital adoption ensure that it continues to command attention from global capital. In line with this momentum, a coalition of eight major U.S. and Indian venture and private equity firms—including Accel, Blume Ventures, Celesta Capital, and Premji Invest—recently announced over $1 billion in commitments to support deep tech startups. The Accel–Prosus partnership now stands as a timely and powerful example of how leading global investors remain committed to India’s long-term entrepreneurial future, working collaboratively to turn its technological promise into a scalable, inclusive, and globally competitive reality.
Sourse: https://techcrunch.com/2025/10/26/accel-and-prosus-team-up-to-back-early-stage-indian-startups-building-for-1-4b-people/
