Accel and Prosus team up to back early-stage Indian startups

In a significant move aimed at nurturing India's startup ecosystem, renowned investors Accel and Prosus have announced a new investment partnership focused on supporting early-stage startups. This collaboration, unveiled on Monday, represents Prosus's inaugural investment at the formation stage, marking a pivotal shift in their approach. The partnership will see both firms co-invest from the very beginning of a startup's journey, with a specific emphasis on companies that are addressing systemic challenges in critical sectors such as automation, energy transition, internet services, and manufacturing. As the world's most populous country, with over 1.4 billion residents, India is witnessing a surge in its digital economy, fueled by a vast user base of over a billion internet users and more than 700 million smartphone users. Despite the promising landscape, much of India's startup activity has revolved around adapting existing global business models. The Accel-Prosus alliance aims to change this narrative by encouraging the development of innovative solutions tailored to India's unique challenges. This initiative expands Accel's early-stage program, Atoms X, which was launched in July to support what the firm describes as 'leap tech' startups — those tackling large-scale, systems-driven issues. Pratik Agarwal, a partner at Accel, expressed optimism about the timing for this initiative, stating that the Indian startup ecosystem is poised to transition from merely adapting global models to creating homegrown solutions that can propel the country toward becoming a developed nation. He pointed out that startups focusing on population-scale solutions often face hurdles in securing early-stage funding due to extended development timelines and the potential for significant equity dilution before achieving traction. Through this partnership, Prosus has pledged to match Accel's investments in each startup, with initial funding amounts ranging from $100,000 to $1 million, a figure expected to increase as the partnership evolves. Ashutosh Sharma, head of the India ecosystem at Prosus, highlighted the importance of combining resources to tackle the ambitious goals set by these founders. While Prosus has traditionally concentrated on late-stage investments, this collaboration marks a new chapter in their investment strategy. The partnership broadens the operational scope of both Accel and Prosus in India, with recent co-investments in innovative startups such as Arivihan, an AI-powered tutoring platform, and Wiom, a low-cost internet service provider. Sharma further noted the relevance of AI-led disruptions in shaping the future of nations, emphasizing that countries like the U.S. and China stand to gain significantly, positioning India to find its rightful place in this global narrative. With rising geopolitical tensions influencing investment flows and technology supply chains, India is increasingly viewed as a strategic priority for global investors, bolstered by a vast domestic market and a growing pool of technical talent. Agarwal reiterated the importance of India charting its path as an independent, developed country in the global economy. Accel has successfully backed over 40 startups through its Atoms program, with more than 30% of these ventures securing subsequent funding from external investors, including Accel itself leading numerous follow-on rounds. Despite a 25% decline in VC funding in India during the first half of 2025, the country remains a focal point for global investment due to its large population and burgeoning digital adoption. Recently, a coalition of eight U.S. and Indian VC and private equity firms committed over $1 billion to support deep tech startups, further illustrating the ongoing confidence in India's potential. The Accel-Prosus partnership exemplifies the long-term commitment that global venture capitalists are willing to invest in India's future.