Accel and Prosus to co-invest in former’s early-stage founder programme Atoms X

(L to R) Pratik Agarwal, Partner, Accel and Ashutosh Sharma, Head of Investments - India and SEA, Prosus

Accel and Prosus, two of the most prolific venture capital (VC) firms in India, will begin co-investing in early stage companies and founders as the two look to double down on the India opportunity and provide more capital to promising entrepreneurs, two top executives at the investing majors told Moneycontrol.

What is Atoms X?

Atoms X is a programme run by Accel with a focused initiative to provide resources, including funding, to early-stage founders. It invests in companies across sectors but focuses only on Indian founders or founders building for India.

It focuses on Leaptech, which goes beyond deeptech, as a sector and is far more encompassing.

Until now, Accel was the sole investor in companies as part of this programme that cleared the Atoms X process but now it is open to collaborations

How much will Accel and Prosus together invest in companies as part of Atoms X?

Prosus will match Accel’s investment in each company, enabling a seamless transition from seed to scale. Earlier each company would get around $250,000 to $1 million in funding but now they’ll be able to raise around $500,000 to $2 million at the early stage.

But why are Accel and Prosus partnering for Atoms X?

He added that follow on fundraising becomes easier when other large names, like Prosus, are involved. “For these leaptech founders starting their journey, they wonder who will be there when we need capital at scale, apart from Accel. The Series A investor, the Series B investors and everybody else now feels more confident seeing an investor like Prosus. It sends a huge energy in the ecosystem where we can expand the ambitions of the ecosystem,” Accel’s Agarwal added.

Accel has no dearth of capital, so why is it partnering with Prosus?

“At Accel, we are long-term greedy. We do not look at individual transactions. We are trying to create a movement here. Today it is Prosus, tomorrow hopefully more investors follow suit,” Accel’s Agarwal said.

Accel and Prosus are hopeful more top tier VC funds come onboard and co-invest so bold ideas can be backed and capital, even at later stages, is not an issue.

But what is in it for Prosus?

This partnership will not mean that Prosus signs more early stage deals, Ashutosh Sharma, Head of Investments – India and SEA, told Moneycontrol.

“Our ecosystem’s level of audacity needs a step jump from where it is today.  In 2012-13 audacity would be starting a food delivery. Today it is different. Audacity changes over time,” Sharma said in the interview.

In the next 2-3 years, Sharma says the collaboration would be a success if more and more people start up. “Just like how people think of starting the next 10 minute thing today, if everyone starts thinking can I dream? Can I visualise a large population scale outcome? That is success enough. Early stage investing is not our bread and butter, but we have to spark a change.”

In 2-3 years, Sharma and Agarwal are hopeful there are more quality founders because of the collaborative programme. “While there is no prediction on how many more quality founders there will be because of this, we are hoping it will spark a big change. Let me say this, if there are only 30 percent more quality founders, then Pratik and I will be deeply disappointed,” Sharma concluded.