As venture capital (VC) firms increasingly turn to public market listings as a primary exit strategy, Accel’s partner Abhinav Chaturvedi has said the shift is "clear and the right one".
The early investor in Urban Company, which made a stellar debut on September 17 with listing gains of more than 57 percent, said IPOs are now playing a bigger role in venture-backed firms’ exit strategies compared to secondary sales or strategic buyouts.
“It’s a very clear shift, and I think it’s the right shift,” Chaturvedi told Moneycontrol.
“Our goal is to invest in businesses that are enduring, and a public market listing is a key milestone in proving that. It shows the business can be a going concern for the long term.”
It is early days of tech representation in the Indian markets but the “proportion of IPO-led exits will only increase from here”, he said.
Urban Company’s debut underlines both the strength of the platform and the broader appetite for high-quality tech companies in India’s capital markets.
“It’s a unique business with little competition, built on customer-paid revenues and not reliant on burning capital. The quality of the management team and their execution track record over a decade have built credibility and trust. This IPO was a natural next step,” he said.
Chaturvedi, however, admitted that convincing foreign institutional investors (FIIs) to buy into the model was not simple, given that Urban Company operates in categories unique to India.
“It wasn’t straightforward but over years of consistent delivery, the conversations matured. By the time of the IPO, investors could clearly see the execution matching what management had been saying,” he said.
The strong investor response to the Urban Company share sale and the listing gains are likely to fuel confidence among late-stage startups weighing the public route.
Urban Company's Rs 1,900-crore offer was subscribed 103 times, the most subscribed main board IPO of the year.
“I hope this accelerates the positive momentum,” Chaturvedi said. “The representation of digital and tech stocks in Indian public markets is still very low compared to global markets, and I see it only growing. Over time, a significant portion of India’s market cap will be made up of tech and digital companies.”
Chaturvedi added that with the public markets receptive, some management teams are going directly for a listing.
Accel has been steadily preparing its portfolio for the transition.
“In the last 10 months, we’ve had four IPOs. In the next three to six months, we’ll likely see another two or three,” he said. The firm’s focus is on ensuring companies have the right teams, boards, and compliance frameworks in place.
Captain Fresh, Amagi, and Cure Foods are some of the Accel-backed companies that have filed their draft papers in the past couple of months.
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