Accel's Atoms programme to unveil up to 15 startups in its first cohort

Accel is set to introduce up to 15 startups in the first ever cohort of its pre-seed programme, Accel Atoms. The move comes at a time when early-stage investments have been heating up since 2020.  

The selected startups were shortlisted from over 2,500 applicantions coming from crypto, software as a service (Saas), and direct to consumer (D2C), among other sectors.

"The premise was simple: Early stage startups need easier access to non-dilutive funding, they also need mentorship from founders and operators, and a community to empower and learn from. Accel Atoms would give them all of this," said Prayank Swaroop, partner, Accel.

October 2021-founded Brew Money is a decentralised neo bank, and Kluster-- founded by Akash Venkat and Aman Singhal, is a peer-to-peer learning platform-- are part of Atoms' October 2021 cohort. Accel Atoms, which is a part of Accel’s sixth fund of $550 million, invests $250,000 in early-stage startups with an uncapped convertible. 

Raising funds on convertible notes has become a common practice among early-stage startups as it allows equity dilution in the next funding round, and investors get to take early bets on probably the next Zomato or Freshworks. 

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Sequoia Capital India, along with Chiratae Ventures’ Sonic, Elevation Capital, and Stellaris Venture Partners, among others, have all been backing firms through convertible notes in some form or the other.  

When asked the reason behind starting a pre-seed fund after being in the Indian startup ecosystem since 2006, Prayank said,

“We wanted to be ready to train these startups by providing all our expertise. Our focus has also been on good mentors who can provide one-on-one mentorship to young startups. Earlier, we did not think the time was right. Now it is.”

Earlier known as Erasmic Venture Fund, Accel got major exits through its early bets in ecommerce marketplace Flipkart, which got acquired by Walmart; and Freshworks, which got listed on Nasdaq last year.  

This year, Accel is reportedly increasing its India fund size to $800 million from $550 million raised in 2019. While Prayank refused to comment on the development, the move comes at a time when early-stage investments have been heating up with marquee investors including Tiger Global Management, taking earlier bets. One of the recent investments being a $32 million Series A round led by Tiger Global in Jar, a less than a year old fintech firm.