By any benchmark, Accel is among the top venture firms in India. With nearly two dozen Indian unicorn startups, including several category leaders, Accel’s track record speaks for itself. Yet the partners leading the firm’s early-stage accelerator program, called Atoms, are uncharacteristically introspective about their learnings and the changes they have been implementing to improve the odds of success.
“One fundamental belief we have is that at some point in time, all VC firms look the same to a founder. It’s just money,” said Prayank Swaroop, a partner at Accel, in an interview.
All VC firms have also grown increasingly focused on making early-stage investments in India in recent years and finding the next Flipkart at the seed stage. The shift is primarily driven by the realization that India is not producing many billion-dollar exits, making it imperative to the VC funds to get in earlier to dramatically improve their returns.
An accelerator program run by a fund that invests in startups at various stages faces unique challenges. If the firm fails to significantly support its accelerator portfolio in subsequent funding rounds, it can send a negative message to the industry. Furthermore, experienced entrepreneurs may not consider an accelerator to be the most suitable partnership option for their ventures.
These are some of the challenges Accel has been mulling over for nearly half a decade. Before launching Atoms, the venture firm explored building a knowledge repository and a community with SeedtoScale, an earlier program launched by Accel.
“We did Demo Days, we were trying to be very similar to a lot of other funds,” Swaroop told TechCrunch.
Just as fast as Accel tried things, it has also walked back some of its steps. It no longer attempts to initiate mingling between Atoms portfolio startups and other investors, for instance. Swaroop recalled a conversation with a founder who informed him how the investor meetup felt like the startup was being put on a treadmill to artificially impress other potential backers.
Other candid feedback from founders revealed that many were not comfortable engaging with peers in the industry who were years ahead of them.
“We are trying to find our own unique path, and what has worked for some of the other firms, we think it’s not working for us,” he said.
So here’s what that path looks like. Atom’s third cohort features just eight startups, which is notably fewer than other well-known accelerators. And all the selected startups operate within two sectors: AI and Industry 5.0 (smart manufacturing).
Accel invests up to $500,000 in each handpicked startup’s pre-seed round, and there is no valuation cap. In addition to helping the startup strategize, Accel also helps them meet industry players that can become potential partners and customers in the future.
Accel handpicked AI and Industry 5.0 as the themes for Atoms because the firm believes the two sectors will look far larger in the next 10 years, said Barath Subramanian, the other partner leading Atoms.
AI has obvious appeal. Meanwhile, Subramanian said Industry 5.0 has emerged as a key theme as the archaic plants in India and elsewhere finally modernize, paving ways for startups that are bringing efficiencies to take a slice of the tens of billions of dollars flowing to consulting firms and others each year. “These factories generate a lot of data, but until now it hadn’t been used,” said Subramanian.
The smart manufacturing sector has also benefited from New Delhi’s incentives to attract foreign firms to expand their manufacturing bases in the country and also the growing “China + 1” shift among global giants.
More than 800 startups applied to be in Atoms 3.0, and between 300 and 400 applicants were AI startups. Swaroop said nearly two-thirds of all pitches focused on AI startups that sought to solve HR and marketing problems. “If there’s too much noise in the market, it’s a signal for us that we should hunt elsewhere,” he said.
Pallavi Chakravorty, co-founder and CEO of Meritic, said in a statement to TechCrunch that being selected by Atoms has been impactful. “Beyond the capital and learning sessions, being part of Atoms has given us a strong founder community and highly collaborative peer group. For instance,” Chakravorty continued, “when Meritic is faced with a challenge, we can turn to any other team at Accel LaunchPad, which is where we currently operate, or to anyone from Accel’s network of over 200 portfolio company founders, to arrive at a solution.”
Below is the third cohort of Atoms:
Spintly
Spintly is an IoT platform that simplifies access control to commercial and residential buildings. Unlike traditional systems, Spintly uses a distributed IoT architecture and edge computing technology, which eliminates the need for heavy back-end infrastructure and enables smartphone-based door access to users. Spintly has eliminated 200k plastic badges and 2k miles for wired infrastructure from the built world and currently serves 300+ customers and 4k+ doors.Asets
Canada-based Asets has launched an AI-powered, first-of-its-kind cloud-based Integrated Design Suite, a multidisciplinary CAD, simulation and engineering design platform that helps Engineering Procurement Construction (EPC) and end-owner companies accelerate their early-stage engineering by 10x. Customers benefit from the rapid deployment of engineering resources, lowering effort time and costs related to engineering projects.Tune AI
Tune AI is a GenAI stack for enterprises with solutions that include Tune Chat, an AI chat app with over 180,000 users and powerful models for text, code generation, and brainstorming, and Tune Studio, a comprehensive solution for fine-tuning, deploying, and managing the GenAI model lifecycle and enabling data security with enterprise-grade compliance.Skoob
Skoob is a generative AI platform which is revolutionizing the way readers interact with books. Instead of navigating through entire volumes, we harness the power of AI to dissect books into topic-centric sections. We are making knowledge consumption intuitive and user-friendly.Arivihan
Arivihan is India’s 1st AI-based 100% Automated Learning Platform providing each unique school student with a personal tutor in their pocket at ₹300 per month, guiding them in planning for their exams, teaching them with video lectures, talking to them, solving their queries instantly, and validating their knowledge by testing and improving them anytime they want, in the speed they require.Meritic
Meritic is a storytelling co-pilot for financial planning and analysis (FP&A) teams to automate reporting and business analytics. Meritic combines the power of knowledge graphs and language models to do highly contextual analysis, collect qualitative insights, generate relevant commentaries and automate financial deck creation.
(Two startups in the cohort remain in stealth for now.)
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