Accel is one of the top VC funds in India and globally; its India portfolio is currently valued at over $100 billion
Tshrabonti.b@livemint.com
he ring is the first thing I notice as I start a Zoom call with Prashanth Prakash, founding partner at venture capital firm Accel. The 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.
“Do you take a lot of standing meetings?” I ask. Prashanth, 58, nods shyly. “Yes, 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. “What could we do in our 40s and 50s that would make our 70s and 80s fulfilling and meaningful, both cognitively and physically? I’ve gone down a deep rabbit hole 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. “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 the 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 non-profit hospital the institute is setting up in Bengaluru.
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. At the moment, Prashanth focuses on companies in the consumer internet services, online marketplaces and SaaS 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. Its India portfolio is currently 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 attending board meetings in person, which creates a lot of travel,” he says ruefully.
As chairman of Karnataka’s Vision Group for startups, which promotes entrepreneurship in the state and the city, he works with the government on strategy, policy, and “helping Bangalore keep its edge”. He plays a similar role at the national level, working closely with the National Startup Advisory Council to support the incubation ecosystem and influence policy. “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. “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 as a nation.”
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 pandemic, which invests in social entrepreneurship. 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.
Prashanth wears his achievements lightly. In the startup world, he has the 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. He shares many traits with the spirit of the city that he champions—public-spirited and visionary while practising personal frugality.
He credits his father for his interest in entrepreneurship. “He worked for HMT for many years,” he recalls. “Somewhere along the way, he decided to quit his job and became an entrepreneur, which in those days, meant building a small-scale industry.” His father supplied components to ITI (Indian Telephone Industries), taking a bank loan and using up family savings.
Prashanth 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 for an MS in computer science at University of Delaware. His first job was with a defence tech company in Maryland, where he
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worked between 1991-95, when he returned to India.
It was an exciting time—the internet was nascent but promising—and Prashanth started an animation company called Visual Reality. His “first real startup” was Netkraft, a digital transformation services company founded in 1997 with technology entrepreneur Atul Jalan. The startup ecosystem in India in the late 1990s was 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—people from textile and trading industries, from traditional Marwari communities. Nobody else saw the potential of the internet. They seeded, arguably, India’s first internet company. And that’s where the story began.”
There was a sense of doing everything from scratch. “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. I still remember working with NID, hiring the first cohort of people and actually training them in a graphic tool,” he says .
Then, the dotcom crash of 2000 happened, followed 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 venture—incidentally, one of the first companies it built
Priya Kuriyan 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. It’s a really satisfying journey 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 among technology founders in India. He connected with Subrata Mitra, his grad-school classmate, and the two started an incubator called Erasmic in 2004. “The whole idea was, how do we help global companies in what we called ‘differentiated services’ or ‘next gen services’ get started in India. 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.
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. “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, 2007-08, that Accel entered the country.
Erasmic and Accel “courted each other” for a while and finally merged to become Accel India in 2008. 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) met Sachin and Binny…”
How does it feel, looking back, to know that one has been a part of these changes, which have had a huge economic, social and cultural impact in India? “It feels very unreal,” says Prashanth. “Sometimes I think—if I hadn’t moved back to India, if I didn’t start an internet company, didn’t catch up with Subrata, if Google didn’t back us… 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.”
What does it take to be a successful venture capitalist? “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,” he says.
As a new grandfather, Prashanth has been reflecting more on life and work. “Becoming a grandparent is a milestone— your horizon changes,” he says.