Four years ago, two technology industry veterans, PrashanthPrakash and Subrata Mitra, cashed out of Net Kraft and TavantTechnologies, respectively, and decided to explore the early-stageventure and seed capital industry. Rather than launch a formal seedfund, the duo decided to cut their teeth and set up an InvestmentClub, gathering money from friends in the industry, angel investorsand high net worth individuals to invest in five earlystageinvestments. After muddling through these first five investments inIT (and getting their hands dirty by being closely involved in theirday-to-day operations), the duo decided to set up their first formalfund of $10 million, with the likes of Infosys co-founder N.S.Raghavan, IT industry maven Prakash Bhalerao and New Silk Route'sParag Saxena as investors.
Now, four years and fifteen investments (and two partners) later,the foursome have sold their early-stage focussed VC firm to Accel,a 25-year-old VC firm that has backed the likes of Veritas Software,Real Networks, Macromedia and Foundry Networks. This is criticalfor us to step up our focus on the start-up market, says Prakash,adding, we will now set up our second fund of around $60 million,which should close by the third or fourth quarter of this year. Despite the broader focus of Accel, Erasmic (now renamed AccelIndia) will continue to retain its early-stage focus.
This market is vastly underserved, although there are literallydozens of VCs in later-stage investments, says Prakash. Accordingto him, Accel India will focus on around 30 deals, starting withsmall investments of around $500,000 and increasing funding based onbusiness requirements. We believe that there are many opportunitiesbeyond IT and software products in markets such as KPO, lifesciences, Internet, mobile and consumer businesses that are justbeginning to take off, says Prakash. If the man sticks to his word,then the Accel+Erasmic equation may work to the advantage of manywannabe entrepreneurs.
Rahul Sachitanand
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