Prashanth Prakash: Master mentor

Prashanth Prakash, Partner at Accel (Illustration by Priya Kuriyan)
Prashanth Prakash, Partner at Accel (Illustration by Priya Kuriyan)

Summary

The founding partner of venture capital firm Accel on his role in shaping the Indian startup ecosystem, and how learnings from it can be leveraged for social good

The ring is the first thing I notice as I start a Zoom call with Prashanth Prakash, partner at Accel, one of the top venture capital firms in the country. The sleek, black Oura ring, a health and fitness tracker, sits snugly on the index finger of his left hand, telling me two things immediately: that Prashanth is a fitness enthusiast, and that he likes trying out new tech (smartwatches might be all the rage right now but smart rings are the future). Then I notice that he is still standing as we start our chat—perforce over Zoom because Prashanth’s travel schedule over the past few months has been so hectic that finding time to meet him in Bengaluru, where he is based, has been almost impossible.

“Do you take a lot of standing meetings?" I ask. Prashanth, 58, nods shyly. “Yes, a lot of standing meetings and walking meetings. My wife and kids make fun of me sometimes…" he says, smiling. It’s part of a “paradigm shift" that happened six or seven years ago, when he started looking at life in terms of a “health span" rather than lifespan. “I started thinking about what we could do in our 40s and 50s that would make our 70s and 80s fulfilling and meaningful, both cognitively and physically. So I've gone down a deep rabbit hole from that point and have still not come out, because health is a multi-dimensional, complex space. You have to understand the underlying principles," he says.

It’s not just a personal quest. “There is a mission aspect to it," he says. “In terms of volume of people, we in India think we have the youngest demographic. But, these things change in a decade or two, and our cost of dealing with healthcare can dramatically be influenced by how smart we are in the next decade. I'm hoping to be in a place where I understand this better and can contribute towards that transformation," says Prashanth. In 2022, he partnered with the Indian Institute of Science (IISc) to set up a geriatric research wing as part of the 800-bed, non-profit hospital that the institute is setting up in Bengaluru.

Also read | Invest in new ideas, not flavour of the season, says Accel's Prashanth Prakash

This is the kind of big picture thinking that has made Prashanth one of the top venture capitalists and investors in the country — someone who continues to shape the startup ecosystem in India, which he has had a ringside view to over the span of two decades and more. At the moment, Prashanth focuses on companies in the consumer Internet services, online marketplaces and SaaS space and has led investments in startups like BlueStone, BookMyShow, FabHotels, QwikCilver, Rentomojo and TeaBox, but he will perhaps always be best remembered as the person who, along with co-founder Subrata Mitra, bet on Flipkart back when e-commerce was but a glimmer in Indian founders’ eyes.

Accel is one of the top venture capital funds in India and globally; in 2022, it announced its seventh India fund worth $650 million (around 5,400 crore) for the Indian and South-East Asian markets, with a focus on early-stage investments in internet companies, besides holding separate funds for growing and late-stage companies. The combined worth of companies in its India portfolio is valued at over $100 billion.

No wonder it’s tough to catch Prashanth. “I have a portfolio of 15-18 companies that I actively manage across Southeast Asia and India. Many of my companies are in different cities. I like meeting my founders and entrepreneurs in person and attend board meetings in person, which creates a lot of travel," he says ruefully.

As chairman of Karnataka's Vision Group for startups, a council that promotes entrepreneurship in the state and the city, he works with the government on strategy, policy, and in keeping the state and city ahead as a startup destination in Asia — “I help Bangalore keep its edge," as he puts it. He plays a similar role at the national level, working closely with the National Startup Advisory Council to support the incubation ecosystem and influence policies that help startups in the country. “My third interest is applying my learnings from the venture world and the entrepreneurial world to the world of governance and societal change," says Prashanth. “In 75 years since Independence, we have solved many things, but there are a ton of things unsolved for the country and as a society. So the idea is to look at the ways acceleration drove change in the startup ecosystem — in ways that none of us could have imagined — and ask if we can take some of these learnings and use them to accelerate change in the social sector, before we are 100 years old."

Prashanth and his wife Amitha made their debut on the EdelGive Hurun India Philanthropy List 2023 with a donation of 9 crore. He is closely involved with the non-profit venture philanthropy platform, ACT Grants, founded during the covid 19 pandemic, which believes that an entrepreneurial mindset, technology and collective action can create social impact at scale. Over the past year, he has also co-founded Unboxing BLR, an ongoing project to showcase Bengaluru as a city of innovation, science, art and culture through books, films, festivals and an upcoming museum of technology.

Prashanth wears his achievements lightly. In the startup world, he has an universally held reputation of being unassuming and infinitely approachable, giving as much time and attention to the youngest and smallest of the companies he mentors as the unicorns and ‘soonicorns’ that have flourished under him as a VC. He shares many traits with the philanthropic spirit of the city that he champions so hard — public-spirited and visionary while practising personal frugality and a certain non-showiness. 

Also read | Indian startup funding shrinks by 73% in 2023. What model companies can adopt now?

He credits his father for his interest in entrepreneurship. “If you were an engineer in my dad's era, either you joined the government or you joined the public sector, and he worked for HMT for many years," he recalls. “But somewhere along the way, he decided to quit his job and became an entrepreneur. In those days, being an entrepreneur meant you built a small-scale industry. So he built a factory for supplying components to ITI (Indian Telephone Industries), in a way contributing to the first generation of telephones that were being built in India." His father did not have a lot of capital; he had to take a loan from a bank and use up the family savings to start his company. He saw his father’s struggles and moderate success up close while he was in school and college, doing a BE in Computer Science from Bangalore University, till he went to the US to do an MS in computer science at the University of Delaware.

His first job was with a defence tech company in Maryland, where he worked as an user interface product manager between 1991 and 1995, when he returned to India. It was an exciting time—the internet was nascent but promising, though no one had a clue about the future it held—and Prashanth started an animation company called Visual Reality. His “first real startup" as he calls it was Netkraft, a digital transformation services company founded in 1997 along with technology entrepreneur Atul Jalan, and often spoken of as one of the first internet companies in the country.

The startup ecosystem in India, then, in the late 1990s, was very small, practically non-existent, and very few people were willing to take a bet on technology. “The first investors for Netkraft were from Calcutta and Mumbai, interestingly — people from textile and trading industries from traditional Marwari communities. Nobody else saw the potential of the internet, but they could see it. They seeded, arguably, India's first internet company. And that's where the story began."

There was a sense of doing everything from scratch that he enjoyed. “If you had to do anything new, you had to actually create that capability… Take user interfaces and graphic design. That space did not exist in the country. I still remember working with NID to hire the first cohort of people and actually training them in a graphic tool first," says Prashanth.

The large companies were all caught up in solving for the imminent and much dreaded Y2K, and there was a gap in the internet space that Prashanth and his co-founder spotted. “Netkraft wouldn't have been there if this was something the larger companies were interested in. There was room for a boutique company and a new-age internet company because the traditional IT companies weren't interested in this space," he says. Then, the dotcom crash of 2000 happened, followed soon after by 9-11—tough years for tech companies everywhere but especially for a fledgling internet startup in India. “We had to reinvent ourselves. Had to let go of 200 people, one of the toughest days of my life," says Prashanth. Netkraft pivoted from being a dotcom to an enterprise internet firm—incidentally, one of the first companies it built a website for was Wipro. In 2004, it exited to a global company. “We were able to give a return to the people who had raised capital for us. That felt good. It’s a really satisfying journey as as entrepreneur when you're able to return capital," says Prashanth.

Being an entrepreneur and raising money had shown him that there was a hunger for capital amongst technology founders in India. He connected with Subrata Mitra, his grad-school classmate, and the two started an incubator called Erasmic. “The whole idea was how do we help global companies get started in India, especially global companies in what we called ‘differentiated services’ or ‘next gen services’. You will understand what I mean by this when I tell you that one of the first companies we incubated was Mu Sigma," says Prashanth, referring to the data analytics firm founded by Dhiraj Rajaram in the US in 2004 that became a unicorn in 2013. 

“What we could do for these companies like Mu Sigma was give them our support and take equity for sweat and also syndicate and raise money for them from angels," he explains. Soon after, Erasmic transitioned from being an incubator to a venture fund, backed by Google to the tune of $10 million. The next few years were pivotal for the Indian startup ecosystem, as global technology companies like Google, Amazon and Yahoo! started setting up offices in India, encouraging many young engineers who had moved abroad to return. “People like Mukesh Bansal came back to India. We ended up funding Myntra, but not Myntra as we know it today—it was into corporate memorabilia. That was the beginning of a new era," says Prashanth. It was around this time that Accel Ventures entered the country. “Accel believed that great companies will get built globally, and not just in the Valley. They had already expanded into Europe and China, and Peter Wagner, of the partners, was driving this," he adds. 

Erasmic and Accel “courted each other" for a while and finally, Erasmic became Accel India in 2008. It was a big moment for the ecosystem—becoming part of a global startup fund, one of a few that were making inroads into the country, such as Westbridge, Nexus, Matrix, and Sequoia. Prashanth credits the Global Capability Centres (GCCs) of multinational companies with creating a talent pool that would feed startup culture. “You needed that seed talent without which the startup ecosystem would not have developed. Sachin and Binny (Bansal, founders of Flipkart) came out of Amazon. At the same time capital formation started happening. Around 2008, we (he and his partners at Accel India) met Sachin and Binny…"

How does it feel, looking back, to know that you have been a part of these changes, which have had a huge economic, social and cultural impact on economic activity in India? “It feels very unreal," says Prashanth. “We were really fortunate to be in the right place at the right time. Sometimes I think — if I hadn’t moved back to India, if I didnt start an internet company, didn’t catch up with Subrata, if Google didn’t back us… there's a whole host of these events where these dots connected very well. These are goosebump moments — because any one of these dots, if they were not connected, I don't think we would have got to the next stage."

And what does it take to be a successful venture capitalist? Prashanth is very clear about what it means: “It's about having the ability to form certain forward-thinking opinions or views on where things are going, or where value could emerge from in the ecosystem, and finding the right entrepreneurs and teams who can give concrete shape to that vision. Sometimes, its the entrepreneur who has that deep understanding, and then it’s about being able to identify them and align with them."

To him, a VC is not the overbearing Big Boss type, doling out ‘adult supervision’, as often portrayed in popular culture. “In my mind, it is being a guide and mentor, who can work with the entrepreneur at multiple levels — at the minutia and the nitty-gritty, if the entrepreneur desires your support at that level, and also somebody who can be strategic and share a vision." You don’t have to be a parent or a buddy, he adds—“though I have helped founders through personal and professional crises, including fights between co-founders," he says, twinkling—but someone they can lean upon.

As a new grandfather, Prashanth has been reflecting more on life and work. “Becoming a grandparent is a milestone—your horizon changes," he says.

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