Prosus to co-invest in founders making it to Accel’s new Atoms X startup accelerator

Atoms is Accel’s pre-seed accelerator programme for Indian and Indian-origin founders across the world, launched in 2021. The newly introduced ‘X’ track within Atoms, which debuted in July this year, zeroes in on what the firm calls ‘leap tech ideas’ — ventures pushing the frontier of technology, business, or product innovation.

“The idea is to back a new era and evangelise an entire movement across a bolder flavour of entrepreneurship," Pratik Agarwal, partner at Accel and head of the Atoms X programme told Mint. Agarawal focuses on the firm's investments in AI, cloud, SaaS and consumer tech.

Tech investor Prosus' decision to back founders from the X programme is rooted in its philosphy of backing companies that can scale to become generational behemoths.

Traditionally, the firm's investment focus has been primarily in classifieds, payments and fintech, food delivery, and edtech. “While our bread and butter continues to be backing such companies now, we recognise that the world is going to look completely different, five, six, even seven years from now," said Ashutosh Sharma, head of India ecosystem at Prosus.

While not strictly ‘leap tech’, India’s deeptech ecosystem has seen a surge in both fundraising and VC deployment this year. Sector-focused firms are raising larger funds and finding increased LP appetite for a segment that has traditionally required patient capital. Generalist funds, too, are now eyeing deeptech more closely — signalling a turning point for a chronically underfunded sector.

Three buckets

Both Accel and Prosus are sector-agnostic under Atoms X, with focus areas spanning energy, healthcare, education, transport, and “ideas across all human conditions."

Leap tech represents a formalised new thesis for Accel under its eighth fund, a $650 million corpus. The fund targets enterprise-grade AI, consumer startups in tier-2 cities, fintechs across wealth management and infrastructure, and India-native manufacturing.

While both Accel and Prosus have said they're going to be making a $1 million investment each in Atoms X companies, they've not decided on the equity stake either of them will take in the companies. “Who gets what equity will move around, but given that this is Accel's programme, there may be situations wher they get more equity and we're completely fine with that," said Sharma.

For founders to be a part of the Atoms X track, they have to fit into one of three buckets. “In terms of ideas, we want to see leap tech ideas, so they can be either a technical breakthrough, a business breakthrough, or a product breakthrough," said Agarwal.

That being said, the firm has invested in at least four ‘leap tech’ companies since 2022.

Accel wrote a $250,000 seed cheque to autonomous kitchen robot Posha in 2022. Last year, the firm provided $1.7 million to flying taxi maker Sarla Aviation and led the $11.4 million Series B round of full stack food processing platform S4S Technologies Acumen, Chiratae Ventures, and Global Innovation Fund. In June this year, affordable internet services provider Wiom raised $40 million in Series B round led by Accel and Bertelsmann India Investments.

Building roti, kapda, makaan innovation

For Prosus, its about backing companies that are able to shift how Indians live. “We're looking for something that is not marginal in its value accretion," said Sharma.

He provides an example of an investable company that can be a part of Atoms X, a flour mill that is able to reduce waste production from 30% to 2% while increasing output by 1.3 times.

“This is the type of roti, kapda, makaan ideas we want to help create."

Prosus' involvement in the Atoms X is part of the firm's larger commitment to backing companies from India that newly appointed chief executive Fabricio Bloisi had mentioned in an earlier conversation with Mint.

Over the past few years, the Dutch global investor has invested in and shaped several unicorns and high profile companies in the country including now-listed food delivery company Swiggy, recently IPO'd Urban Company, ride hailing company Rapido, e-commerce marketplace Meesho. Bloisi had told Mint that the company was planning to make large private equity style bets in the country. To that end, it recently picked up 10% stake travel tech platform Ixigo for ₹1,295 crore.