Accel, one of the top venture firms in India, consistently ranks high by any measure. Their impressive track record of almost two dozen Indian unicorn startups, including many category leaders, speaks for itself. But despite their success, the partners leading Accel’s early-stage accelerator program, Atoms, are taking a rare moment for introspection. They are reflecting on their learnings and the changes they have made in order to improve their chances of success.
“One fundamental belief we have is that at some point of time, all VC firms look the same to a founder. It’s just money,” said Prayank Swaroop, a partner at Accel, in an interview.
It’s true that all VC firms are now hyper-focused on making early-stage investments in India and identifying the next Flipkart at the seed stage. This shift has been driven by the realization that there are not many billion-dollar exits in India, making it crucial for VC funds to get in earlier to improve their returns.
Accel has been trying to find the right fit for their early-stage accelerator program for almost five years now. Before launching Atoms, the venture firm explored building a knowledge base and community with Seed to Scale, which they continue to develop.
“We did Demo Days, we were trying to be very similar to a lot of other funds,” said Swaroop, pictured above.
But just as quickly as Accel tried things, they also took a step back. For example, they no longer try to facilitate interactions between Atoms portfolio startups and other investors. Swaroop recalls a conversation with a founder who felt like they were being forced to put on a show for potential backers during the investor-meetup events.
Another piece of honest feedback shared by founders was that they were not comfortable engaging with industry peers who were significantly ahead of them in their journey. “We are trying to chart our own unique path and we’ve realized that what works for other firms may not necessarily work for us,” Swaroop explained.
So, what does their unique path look like? The third cohort of Atoms consists of just eight startups, significantly smaller than other well-known accelerators. Additionally, all selected startups operate in either AI or Industry 5.0 (smart-manufacturing) sectors.
Accel invests up to $500,000 in a pre-seed round for each handpicked startup and does not impose any valuation cap. Along with providing strategic guidance, Accel also helps the startups connect with industry players who can potentially become partners or customers in the future.
Now, let’s take a closer look at the third cohort of Accel:
- Spintly
- Asets
- Tune AI
- Skoob
- Arivihan
- Meritic
Spintly is an IoT platform that simplifies access control for commercial and residential buildings. Unlike traditional systems, Spintly uses a distributed IoT architecture and edge computing technology, eliminating the need for heavy back-end infrastructure. This enables smartphone-based door access for users. Spintly has already reduced the use of 200k plastic badges and eliminated the need for 2k miles of wired infrastructure in the built world. Currently, they serve over 300 customers and manage access to over 4k doors.
Based in Canada, Asets has launched an AI-powered, first-of-its-kind cloud-based Integrated Design Suite. This multidisciplinary CAD, simulation, and engineering design platform helps Engineering Procurement Construction (EPC) and end-owner companies accelerate their early-stage engineering by 10x. Customers can benefit from the rapid deployment of engineering resources and save time and costs related to engineering projects.
Tune AI offers a GenAI stack for enterprises, including solutions like Tune Chat, an AI chat app with over 180,000 users, and Tune Studio, a comprehensive solution for fine-tuning, deploying, and managing the Gen AI model lifecycle. These tools also ensure data security with enterprise-grade compliance.
Skoob is a generative AI platform that is revolutionizing the way readers interact with books. Instead of navigating through entire volumes, Skoob uses AI to dissect books into topic-centric sections, making knowledge consumption more intuitive and user-friendly.
Arivihan is India’s first AI-based 100% automated learning platform, providing personalized tutoring for school students starting at a cost of ₹300 per month. This includes exam planning, video lectures, instant query resolution, and self-paced learning.
Meritic is a storytelling co-pilot for financial planning and analysis (FP&A) teams, automating reporting and business analytics. Through the use of knowledge graphs and language models, Meritic can perform highly contextual analysis, collect qualitative insights, generate commentaries, and automate financial deck creation.
(Two startups in the cohort remain in stealth mode for now.)
Accel handpicked AI and Industry 5.0 as the themes for Atoms because they believe these two sectors will significantly increase in size over the next decade, according to Barath Subramanian, the other partner leading Atoms.
Subramanian explained that Industry 5.0 has emerged as a key theme because many archaic plants in India and around the world are finally modernizing. This creates opportunities for startups to bring efficiency to this industry and take a slice of the billions of dollars that companies currently spend on consulting firms and others each year. “These factories generate a lot of data, but it hasn’t been utilized until now,” Subramanian added.
The industry has also benefited from the Indian government’s policies and incentives to attract foreign firms to expand their manufacturing bases in the country. Additionally, the trend of “China +1” among global giants has further boosted this sector’s potential for growth.
More than 800 startups applied to be a part of Atoms 3.0, with almost 300-400 of them being AI startups. Swaroop revealed that nearly two-thirds of all pitches were focused on AI solutions for HR and marketing problems. “There’s too much noise in the market, and it’s a sign for us to shift our focus elsewhere,” he said.
“Beyond the capital and learning sessions, being part of Atoms has given us a strong founder community and highly collaborative peer group – for instance, when Meritic is faced with a challenge, we can turn to any other team at Accel LaunchPad, or to anyone from Accel’s network of over 200 portfolio company founders, to arrive at a solution,” said Pallavi Chakravorty, co-founder and CEO of Meritic, in a statement.
“The Founder Anonymous sessions have helped us open up to the cohort in an unfiltered manner, and the GTM talks have been instrumental in shaping our B2B sales strategy,” Chakravorty added.
