306 / April 4, 2025
How a VC Found His Niche | Prayank Swaroop’s 15-Year Journey at Accel
Where should AI money Go?
In this episode of The Neon Show, we bring you into the room with someone who’s spent over a decade backing India’s most ambitious companies.
We’re joined by Prayank Swaroop, Partner at Accel. With over 14 years in venture capital, Prayank walks us through his journey of discovering and building expertise in specific sectors—from cybersecurity and developer tools to SaaS and marketplaces—and how VCs identify the categories they truly understand.
We dive into how Accel chooses best founders, and the balance between backing founder versus business across stages. Prayank shares his candid thoughts on why India has been slow and late to the AI race, and what a realistic way forward could look like for Indian startups.
He also offers a glimpse into Accel’s evolving investment thesis around AI, sector by sector, and talks about how the enterprise landscape is changing—and what that means for Indian founders building in this space.
Tune in!
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Siddhartha Ahluwalia 1:46
Hi, this is Siddhartha Ahluwalia, your host at Neon Show and co-founder of Neon Fund. I have today Prayank Swaroop with me, partner at Accel. Prayank, welcome to the Neon Show.
So glad to have you today.
Prayank Swaroop 02:00
Thank you. Thank you for having me. It’s amazing to be here.
Siddhartha Ahluwalia 02:02
So Prayank, Accel, I consider among the best investors in India, you know, Flipkart, Freshworks. Swiggy, you know, every different flavor of startup that India has today has come out of Accel’s stable today. So if you have to summarize, right, Accel’s secret mantra of finding great founders, how do you do that at earlier stages?
Prayank Swaroop 02:25
Oh, I think first, of course, one of the big things which we’ve learned from our founders, which is Subrata, Prashanth, Mahendran, was to make sure that the founder who walked into our Accel door has something, net value that we add to the founder. So every interaction which we give to a founder, we are trying to add some value. Is the way they have taught us to judge.
And I think that. Two is, I think, supporting the founders, like one thing which we discuss inside Accel is don’t give up before the founder does. If he’s trying, we have to try with him. I think there are some cultural values which have made us unique probably, but for us, that is the way we do things.
And third is probably the fact that we try to do what we call the prepared mind. So we think in terms of topics where we are going to invest, we think what is going to happen in the future, and we try to cover those right now and go deep in a category and come up with insights so that we can be first investors in the best companies. And then we try to find those founders.
So that’s the way we operate.
Siddhartha Ahluwalia 03:34
And what are the other cultural values of Accel that you think make it unique?
Prayank Swaroop 03:40
I think, yeah, so I think one of the, our IC process is very unique. We don’t have a voting, I think a lot of funds do voting. In Accel, there’s this big debate that at early stage of a company, and we do very early stage investing.
So if you look, we have a 650 million fund, which we raised in January. We will probably do, like majority of the companies we will be the first investors, 80-90% of the companies. And we do seed from let’s say 100K all the way.
We also write 20-30 million dollar checks from that fund. The thing which Subrata had pushed us doing, at early stage, nobody knows how the company is going to perform. So you’re really investing in the team.
And really, the one person, if you ask too many questions from the founder, he will not know all the answers. If you ask too many questions from the investment manager who’s going to invest in the company, they will also not know all the answers. So you’re really investing just on conviction.
And if one person has conviction to invest in that team, you invest. So we don’t have voting. If one person thinks that we should invest in this team, we do.
So even now, I think for up to a certain amount of check sizes, only one person can just invest. Obviously, at a risk management level, if more larger check size, like 10 million dollars, then a bunch of partners get involved. So yeah, that’s the way we do.
That’s another very unique thing. So you will find us doing, we have invested in E-plane company, we invested in quantum computing, we invested in cybersecurity companies, things which are normally you wouldn’t see a lot of other funds doing. That is because some individual investment manager in Accel has believed that I should do this.
And we say, yeah, please go ahead and do it. That’s how we also let people take the risk. So that is the other unique culture aspect.
And I think beyond that, I think maybe it’s a style of diligence in companies also. So at early stage, how do you find out whether the company will do well or not well, right? We typically tend to push founders to not write code.
We tell them, please spend a lot of time with customers, identify the problem statement, which you are trying to solve for. And at least what I have observed is a company which you give, let’s say a half a million versus a company which you give a 5 million. Sometimes the half a million company scales much faster, better than the 5 million company, because the half a million company has only so much money.
So he has to find the kernel of truth. So they go and spend a lot more time with customers to find the right thing. And that is a philosophy.
We typically tell founders, think a lot. Think deeply before you do anything. So that’s the other philosophy difference which we have. Yeah.
Siddhartha Ahluwalia 06:32
And what are the things that you think you could have or Accel could have done differently in the last 10-14 years?
Prayank Swaroop 06:38
Wow, that’s a very interesting question. So we chose to sat out of some categories, like we chose to sat out of crypto at one point of time. We came into crypto much later.
We invested in FalconX, which has become quite big now. So we didn’t invest in a bunch of… I personally, for example, I really like the space tech space.
But I did not invest in Agnikul or Pixxel or Skyroot. And we constantly have this debate as to should we have invested in some of these companies. And there is no right or wrong answer.
So but yeah, I mean, so we could have invested in some of the other sectors where we did not invest. We came, for example, investing in consumer brands much later. Now we have a very large portfolio of consumer brands.
Actually, Bluestone, one of our companies is also going public. But we always thought some of those markets are much smaller. And I think there’s a relearning which obviously goes through in India because India is growing very fast.
Markets are opening up new and new. So I think, for example, we thought consumer markets are small, but then the disposable income in India is growing very fast that you can have much larger companies. So now we are investing in those companies as well.
We have just started investing more into deep tech, you know, IP-led manufacturing companies as well. So we learn from some of the stuff which we don’t do. So that is one of the things.
One of the other things we could have done different is so Accel as a fund, we are a fairly large fund. We started investing in growth companies in India much later. So to be honest, our growth fund investing in India started in earnest only around 2020-2021.
And because of that reason, our participation in some of the best companies in India was limited to seed, series A’s, or sometimes series B’s. And if a company became bigger than, let’s say, $150 million at that time, we would not end up investing in those companies. So we started seeing companies which we thought won’t do well, started doing well, and we were not investors in them.
And we felt bad about it. So then in 2020-2021, we started investing a lot more in the growth. And that practice for us in Accel is fairly new.
Siddhartha Ahluwalia 09:03
But is that FOMO? Because you missed investing in the previous round and now in the fear of missing, catching up?
Prayank Swaroop 09:09
No, I think so there are two ways to look at it. One is logo collection. We don’t like in logo collection.
We look at whether that company which we missed out at $200 million is still going to become a $20 billion company. And we thought that, yes, there were opportunities which we misread. Like for example, crypto, I gave example or consumer brands.
We said, okay, we were wrong. And how do we correct that wrong? Accel has investing dollars.
So we can come into some of these companies later. I think a case in point is, for example, Herodotus. We met them at seed, we met them at Series A, and we just felt that the company might not be able to go beyond India.
But the founders have created an amazing business where a large majority of revenue now comes from outside of India. So we came in the company, we invested $200 million as the first check from our side into the company in the late stage growth round. So I think, and that’s a great part.
It’s like a validation that India startup market is growing. And I am very happy that as Accel, we can come in seed or come in late stage, either side. So that’s what we are trying to do.
Siddhartha Ahluwalia 10:17
So Zetwerk is one of the companies that you bagged that seed has become very big, which are the other companies that have become extremely large today?
Prayank Swaroop 10:25
So my personal portfolio.
Siddhartha Ahluwalia 10:26
Your personal portfolio
Prayank Swaroop 10:28
So Zetwerk is one. I invested in Bizongo.
So Bizongo at last round valuation was around 990 million or 980 million. I invested in one of my companies is Onsite Go. They don’t come in the news and media because they raised only two rounds and they’re growing rapidly.
So they’ve crossed 40-50 million in revenue. So those, then I have another company called Skeps. So it’s a Gurgaon, New York, Indian origin founders.
So they are doing quite well. Again, they don’t get talked about much because they get talked about in the US, not here.
Siddhartha Ahluwalia 11:04
Is it a consumer or a SaaS company?
Prayank Swaroop 11:05
It’s a fintech and SaaS company. So yeah, so that one. Onsitego is an insuretech company.
So those are some of the companies. And then I have Uni cards, which is a credit cards company. So yeah.
So that’s another one.
Siddhartha Ahluwalia 11:26
Got it. Your even personal portfolio is quite diverse. It’s not restricted to one category. How do you spend your own time across categories?
Prayank Swaroop 11:34
Yeah. So I think it’s a very, I’ve been VC for 14 years. When I joined, I had no idea what I was doing.
So I said, okay, how do I learn? So I said, I’ll invest in various sectors and then figure out what I like, what I don’t like, what sectors I understand well. So that is the approach I took.
So I actually invested in a food brand. I invested in gaming company. I invested in a tech company.
And the initial years, a lot of my companies shut down very quickly. So that was learning. I learned what I like, what I can understand, where I went wrong.
And that led me to understand that I like, for example, B2B marketplaces more. At that point of time, when I did Zetwerk and Bizongo, it was something which other investors did not understand well enough. And I thought I understand how things are.
And so I ended up investing in them and they turned out to be a success. Then I was very, always very keen on software and developer tools. So I said, okay, I like it.
I don’t see enough companies coming out of it. Maybe so I, and cybersecurity also. So like three, four years back, I said, I want to do cybersecurity.
There might not be enough companies, but cybersecurity is such a large sector globally. If I will be the first VC to do those investments, then I’ll be great. So I started basically experimenting with new, new sectors.
But over the last couple of years, I’ve been spending a lot of time in AI because I just love AI. And we were debating before this, right? It’s very hard today.
We have not seen enough successes from AI companies and SaaS companies in the last few years from India. So I, but my hope is that we will. So we’ll see where it goes.
Siddhartha Ahluwalia 13:17
But now coming to AI, so why do you think India hasn’t produced like Europe or US level like companies in a short span of three, four years while other countries have caught up?
Prayank Swaroop 13:31
Yeah, I think it’s a multi-layered question. I think if you, so I look at AI in three spectrums. So one is foundational layer.
Second is middle layer, the middle layer. And third is application layer. I think the foundational layer is just absent in India.
And I think that is to do with talent that is to do with capital availability and others. We just don’t have enough deep pockets to go after that. But more so it is, I think nobody was focused.
No investor was focused. No academics were as much focused on it. And it just so happens that we were not even present in those.
So, but now we are, and I hope we will be able to get there. So there are some interesting companies which are building foundational models.
Siddhartha Ahluwalia 14:17
Like?
Prayank Swaroop 14:19
I mean, the right now, the most commonly known names like Sarvam and Smallest AI and bunch of others, but there are a bunch of teams because of the government initiative of India AI mission.
They are forming from IISCs and IITs. They don’t even have names right now. Which have created those companies and we’ll see if it evolves.
So, but it will take time. Foundational layer is not something which will happen in six months, seven months. I think it will take 18 months, but it has to happen.
So that is one. On the middleware layer, I think we are starting to see companies. There are enough companies which are happening in, let’s say, inferencing.
There are companies which are in software development life cycle, Figma to Code, or Code reviews. There are enough companies in databases, which are sort of like, for example, Accel is invested in E6 data. I mean, they are trying to compete with Snowflake and Databricks of the world.
Their performance is amazing. We have DhiWise, which is doing, I mean, they are based out of Surat, but they have built products sometimes. I mean, the founder is telling me they’re performing better than Cursor.
So, I think we will see emergence of such companies coming out. And then finally, you have app layer, right? Now, the interesting thing is to your question, why we haven’t seen enough companies coming out.
First, our ecosystem was slow in adopting AI. Let’s just be very honest about it. For almost one year till after ChatGPT came out, we didn’t see a lot of SaaS companies using AI at all.
Only the new age AI first young founders were using AI for creating software products. So, I think we were late to the game, to be honest. Second problem I think most Indian founders face is that they are away from the customer.
Indian enterprises are still not using AI as much as I would love them to have. So, it’s mostly the most of the AI spends are in the US market, where the cost of employees is very high and they want to have higher efficiency with AI. My advice to all founders would be that you build the products, but please build for the customer.
The customer is there, be there, understand what is happening. And then the third problem, which has now happened since we were late, a lot of the US VCs and entrepreneurs were very fast to the game. The markets and segments are becoming very crowded.
So, if you can think of an idea in a segment, most of the time you will have like 20 competitors. Now, imagine from the buyer perspective for him is like one out of 20. So, how do you know?
So, the Indian entrepreneur has to learn how to market themselves also better. You know, I tell my founders, you have to sell performance and you have to sell perception both because a buyer for him, it’s a very busy market. He needs to pick you.
So, you need to stand out, right? So, I think these are the trifecta of reasons. We were late, you know, we didn’t have enough talent and idea.
Then we are away from the customers. I think that way we were, we are not able to create it. But I think there are, we are starting to find successful companies.
You know, one of our companies, Bridgetown, for example, has just recently raised money, their series A as well. They went from starting the company to a double digit ARR booking in less than 18 months, right? So, and hopefully they’ll compound as well.
So, I think it’s, we will get to know or for example, in India, Invideo is another example. They are 50 million plus in revenue in a very short span. I mean, it’s an old company, but they pivoted to AI and they are growing.
I think we will find those successes, but it will take some time. It will take me, you, all of us to invest also.
Siddhartha Ahluwalia 18:02
And how many core AI B2B companies would Accel have back till now?
Prayank Swaroop 18:07
When you say core AI B2B meaning?
Siddhartha Ahluwalia 18:09
Like, I mean
Prayank Swaroop 18:09
SaaS companies.
Siddhartha Ahluwalia 18:10
Yeah, SaaS companies, but not applying AI as a brush or tool.
Prayank Swaroop 18:15
Sure. Sure. So, I typically, what the way I think of that is I say, Gen AI companies, because then it makes using or generating.
So, in the last two years, we have invested in close to 35 odd generative AI companies in India. I think globally, the number is even larger. So that, for example, Spine is a very good use case.
This company is based out of Delhi, NCR region, and they do vertical AI for car dealers in the US market. So, they started off with a very small niche use case of helping dealers create nice images of cars. You know, typically, a car dealer will get image from their customer of a bad.
So, they just help you remove the background, make it nice. And then they’re slowly becoming the operating system for our car dealers. Like the entire business can be run on Spine is what they’re trying to go after.
Siddhartha Ahluwalia 19:06
Got it. Any other companies in AI that you are excited about from your portfolio?
Prayank Swaroop 19:09
We are co-investors in Rapid Claims. So, Rapid Claims enables hospitals to do medical coding, something and revenue collection management, something which takes a hospital like a file from a patient. It almost takes almost a month, sometimes to figure out what is the right payment, they need to make what we collect from the insurance provider and make to the patient.
And Rapid Claims comes in and solves that problem in a couple of minutes. So, we’re very excited about it. Another company of ours is Presentations.ai. I think they just found themselves in the perfect storm. So, they are growing quite well. So, there are, I think, I mean, of the 27, I mean, there are so many of these. I’ve invested in BPR Hub.
So, they do compliances management for manufacturing companies. It’s another example of a vertical niche area where there’s a lot of grunt work required and they just shrink the period of getting compliances for a manufacturing unit from six months to like three weeks or like a couple of months. So, those are examples.
Siddhartha Ahluwalia 20:17
And you think the space is evolving right now? Like what would Accel do, let’s say three or four AI deals in a month now? Because the pace is so rapidly changing every month.
Prayank Swaroop 20:28
I would love to do three to four in a month, but I don’t think I’m getting enough of those right now. So, if there are entrepreneurs out there, I would love to talk to them. The like, see, recently, that’s why I created the India AI landscape.
So, a lot of my co-founders, a lot of my, a lot of co-investors, and a lot of people from the US were saying, is anything happening in India in AI? We don’t see. And so, I said, okay, let’s document what I can see.
And I picked some names. I think that itself demonstrated to a lot of people that a lot of stuff is happening in India, from India for the global markets. I think so.
I think there is, it’s going to evolve. We are meeting companies every day. New use cases are coming simply because technology is improving to the next level.
So, we are quite excited about AI.
Siddhartha Ahluwalia 21:19
And what are the some sectors that you have built thesis on within AI today?
Prayank Swaroop 21:24
Oh, I can tell you sectors where we are actively thinking right now. And it’s like a call for all entrepreneurs. So, we are thinking of AI and robotics.
We are thinking of eval platforms.
Siddhartha Ahluwalia 21:37
What is eval?
Prayank Swaroop 21:38
Eval is, you know, when you build an LLM system, the output, how do you know it’s good, bad, ugly output?
So, typically, human beings judge it. But by the time a user is going to use it, it’s too late. So, in the development lifecycle of the LLM system or AI system, you need evaluation of the outputs.
And it’s an unsolved problem. It’s a, I think it’s a massive problem if anybody can solve it. So, that is one.
We are looking at cyber security for AI as more and more AI is going to be used everywhere. New vectors of attack are happening. So, what can you do to solve for those?
And also AI for cyber security. AI, cyber security has typically been very expensive. With AI, can you come in and reduce the cost?
So, that’s another one. We are looking at inference engines. So, speed of AI has to improve further and further.
It’s still very expensive. Can it drop more and more? Can it become faster?
AI explainability. You know, how do you know the answer you came to is right or wrong? AI on the edge.
Yesterday, Google announced their Gemma model. So, which is on the 1 billion parameters. So, we are seeing more and more LLMs coming onto the edge on inside the phone.
Like we were talking about AI operating systems for mobile phones, right? So, imagine a mobile phone one year from now, which has AI built into it. Not the Apple intelligence, but even better.
What will it look like? And those are consumer experiences on AI. So, consumer AI is huge.
That’s also what we’re looking at. So, there are a lot of these. I mean, I think we have a list of 15-20 spaces where we are actively trying to find improvements.
Yeah.
Siddhartha Ahluwalia 23:26
So, if you see the early part of Accel’s success in SaaS, there was Freshworks, there was Chargebee and so many other companies, right? Even in vertical SaaS, right? You are present in so many companies, Zenoti…
Prayank Swaroop 23:43
Zenoti, Kstack, yeah.
Siddhartha Ahluwalia 23:45
Yeah. 6 to 7 unicorns, I believe.
But then from that period to this period, there’s a huge gap. Why do you think..?
Prayank Swaroop 23:53
It’s a very interesting question. I think there’s a context. I think when Freshworks got created, very few people knew about SEO and SEM.
And Freshworks was one of the first few companies who understood the importance. I call it the founder’s secret. So, the founder knew about the secret that this is a secret.
And over the years, that secret is no longer a secret. Everybody knows how to do GTM using SEM. Everybody knows.
So, now you are playing with an opponent, which also… What is your unique superpower against them? What is…
How can you defeat them, right? So, new emerging AI companies will have to find that new secret, which will make them work better than anything else. And I’ll give you one example, right?
We were just discussing this today morning. A lot of the AI companies are shooting up like crazy. They’re going from zero to double-digit million revenue in less than a year.
A lot of that is happening because of PLG motion, which is working in favor of enterprises. And it was a complete… I was just thinking, why is this company doing so well?
And we realized that PLG motion typically works for SMB and prosumers. But today, enterprises are being pushed to use AI and they can’t wait for enterprise sales cycle. So, enterprise users are going out and trying products themselves.
So, they are engaging in PLG motion. And some of our companies, like one of my company, because of this PLG motion was… is in talks with a Fortune 100 company to sign up within…
And they’ve been less than one year. I think it’s six months into the product and all of that, right? So, this is a new secret.
Now, it’s… I have told it. How many people will hear it?
How many people will implement it? How will they fit into the… It takes time to diffuse in the ecosystem.
So, the GTM motion secret, like it was for Freshworks, SEM, something similar has to be built on top of that. So, one is category, but the secret of expanding. Then the second vector is how do you fight?
How do you leverage the technology? For example, some of the companies that have become very large today, Harvey, Cursor, bunch of others, a lot of VCs did not want to invest in them. Because they were seen as wrappers on top of GPT, right?
And now they seem like, oh, this was a good business. And I’ve been telling this all the while that it’s okay if you’re a wrapper on GPT, because you want to establish customer value first. If you have established customer…
If you are getting customers, everything else will follow, right? So, a lot of times people overthink that what is my MOAT. And I’ve seen an Indian founders that think too much about features I need to build before I can go and talk to customers.
My argument is, please go and talk to customers now. Don’t build… Customers use 10% of your product.
They build a product as early as possible. So, some of those secrets people have to do.
Siddhartha Ahluwalia 26:45
And are you seeing now Indian founders learn distribution as fast as their US counterparts? Or we are still lagging?
Prayank Swaroop 26:53
I think in enterprise sales, we are still lagging. I think… So, there are two…
Okay. So, let’s break it down. So, SEO, SEM, Indian founders are better or at par with the US.
Content marketing, I think we are slightly behind. People still don’t know how to do it. PLG motion, we need to significantly do better.
People shy away from it. People don’t build PLG first products. People build some product and then they try to do PLG.
Typically, PLG versions come one to two years later after the original product. Whereas in the US, it’s flipped. They just get the product out first.
So, customer feedback is faster. Hiring US enterprise sales team is very uncomfortable for most founders in India. And I think truly so for two reasons.
One, people don’t have enough money to hire a person in the US, which I think can be solved. But two, more importantly, there is another challenge. And most founders don’t want to go to the US in the beginning.
And I think that… I don’t know why we keep telling our founders, you have to go closer to the customers. They should.
So, people think I’ll build in India. But then they just go down the wrong path because of feedback, which they get from customers. There is a new pattern, which is the founder-influencer pattern.
When you land up in the US or forget US, like not even Indian, a US customer, US customer needs to know who you are. Right? What they typically do is they go and search on LinkedIn.
They go and search on, you know, GPT. And then they try to figure out, okay, who is this person who’s selling to me? And if you’re not present there, if you don’t have a presence, how do you build trust versus somebody else who has done that?
We, as the Indian ecosystem, don’t talk a lot about content. We don’t have influencers. But in the US, there are these influencer founders because, hey, this guy is saying he is trustworthy.
He has got a lot of credibility. So, buyers buy from them. Right?
I think that is definitely like… I would say we are already 0 on 10 in India for most founders on that. And that’s something which I’m trying to change in my companies.
Hey, you have to step up. You have to be the face of the company. So, yeah.
Siddhartha Ahluwalia 29:09
And how is the Accel team structured? Like how many partners are there? How many investment members are there today?
Prayank Swaroop 29:14
So, right now we are eight partners. We are two principals. And we have two VPs currently.
And that is the structure of the team. So, any of us can write a check. Any of us, we don’t differentiate between a partner writing a check and a VP writing the check.
So, that’s the way it is structured. We also… And within our 650 million fund, we also run the Accel Atoms program.
So, the Accel Atoms program is like a pre-seed, very early stage. We write up to a million dollars and we take equity in the companies. That kind of a program.
So, we are in the fourth year of Accel Atoms. So, those are the two predominant vehicles. And the check sizes, like I said, range from anywhere from, you know, I would say 100k all the way to 25-30 million.
We just recently announced our investment into TrueMeds. So, where we led their $44 million round. That was the first check which we came in from Accel India.
Accel in the India office. So, yeah.
Siddhartha Ahluwalia 30:19
Then how should we say is the 650 million India fund? Is it a seed fund, series A fund, series A above fund?
Prayank Swaroop 30:26
Well, we are trying to be everything. So, the good part is Accel is not just Accel India. Accel is a family of five funds and we are a global firm.
In India, we are essentially investing out of three funds, not just one. So, we have the 650 India fund. We have Accel growth fund, which is 1.3 billion, which was also raised in January. And then we have a $4 billion leaders fund or a late stage fund. So, all these vehicles are investing across like, for example, Herodotus $200 million came from our late stage fund. So, we have the whole spectrum.
And yeah, I mean, so my job is actually quite interesting. I have to write a 100k check also and I can write a 100 million check also. So, it’s very interesting.
Siddhartha Ahluwalia 31:13
And any partner in the world can write from the growth fund also?
Prayank Swaroop 31:17
Yes. Yes. So, the way we operate is that if, let’s say, Prayank in India finds an interesting company and where he wants to write a $100 million check, I do all the work and I discuss it at the global level.
And at that point of time, if globally, it is one of the good companies you want to invest in that we will invest. So, yeah.
Siddhartha Ahluwalia 31:37
And, you know, some of the learnings that I want to tap into is backing Flipkart and Swiggys, right? They were moonshots right from day zero. Are you seeing that kind of companies getting created again or what they are once in a decade phenomena?
Prayank Swaroop 31:52
I think, I mean, there is VC think that all the roti kapda makan platforms have been done. But entrepreneurs love to surprise. Right.
So there are companies which you and I wouldn’t have think of otherwise you would be entrepreneurs. So we are starting to see some of those companies.
Siddhartha Ahluwalia 32:12
Examples?
Prayank Swaroop 32:14
I mean, that’s a tough one.
So let’s take Truemeds only, which we did right now. Right. If you look at generic medicines space, you would have said, hey, you know, Pharmeasy exists and bunch of other companies exist and there’s no space for yet another platform like this.
But Truemeds is killing it. So Truemeds is growing amazingly fast. So I think they can be a very large company.
They can be a 10 billion plus kind of a company. You have, we invested in Spinny. You know, Spinny is also like one of the de facto winners in that market.
And they’re growing very well. They are the de facto choice for selling cars, used cars. So I think the Indian economy is growing.
So when there are two parts, Indian economy is growing and they’ll constantly be opportunities because the way we live is changing. I mean, like consumer brands didn’t exist before, but now it exists and they can be large companies luxury brands didn’t exist before. Now it’s happening, right?
We are seeing shoe brand. So as the economy expands, you get a lot more opportunity. Similarly, from India for the global markets, a lot more new things are happening.
Like today only we were discussing this. You look at IT firms, you know, you have the Infosys, TCS of the world, but because of AI, now there is another opportunity for SaaS founders to create an AI enabled services firm or an AI specific services firm, both opportunities. So you could recreate Infosys with much lesser number of developers and have the same high efficiency or because AI is going to be used everywhere in software.
There is like for example, evals, which we talked about. I am hoping there is some company which will be like a, you know, 100, 200, 300 million revenue company only doing evals from human beings because that is the way and then they add product ties on top of it. So there’s new areas and use cases that are opening up because of that.
Siddhartha Ahluwalia 34:07
And Accel is doing a lot of content initiatives, like you have… podcast has been there for the long period of time. Seed to scale is there.
So what are the different initiatives and what’s your thinking behind each one of those?
Prayank Swaroop 34:17
We are learning from you. No, I think it’s fairly interesting. We believe in giving back to the ecosystem.
And if you look, most of our content is towards helping the ecosystem. That’s what we have tried to do. In fact, seed to scale was our first initiative where it’s not Accel branded.
We didn’t want it to be Accel branded. We haven’t, we’re trying to figure out where we participate with the community and we would love more founders to come and contribute to that community. Even for example, in Atoms, when we do Atoms, we have not kept it a closed book.
What we try to do is we open source and we say, hey, anybody who’s smart, even if we have not invested in you, please come and talk to all the founders. We also bring, open up those events for other founders who want to come and learn. We say, come.
You want to do SEO? Okay, one of the eminent personalities, Rakesh Bhai on that will come. He will teach.
So please come. Right. So, and we let the ecosystem.
What I like, you know, US, when I go to the US ecosystem, Valley ecosystem, there’s so much of learning, so much of knowledge sharing happening. And that is the same thing which we need to do. We need, I think, 100 more Neon podcasts.
We need a lot, 100 more seed to scales. We need entrepreneurs to teach other entrepreneurs. Only then the pace at which we grow will, you know, compound.
So, so seed to scale is one of our initiatives. Atoms is another initiative which we do. And we would love to hear from your audience as well as to what we should do, put out more.
There have been discussions around, hey, we should put out how to do GTM planning, how to do your accounting in SaaS, those kinds of things as well. So, yeah.
Siddhartha Ahluwalia 35:59
And what is the secret of surviving 15 years as a VC for you personally?
Prayank Swaroop 36:05
Oh, I think VC for me or for Accel?
Siddhartha Ahluwalia 36:11
For you and then for Accel Sir.
Prayank Swaroop 36:13
So for me, I think there are ups and downs. I would say I am here because of my wife. Okay.
There was a time I had almost given up that I said investing is very hard and I don’t think I can be a good investor.
Siddhartha Ahluwalia 36:26
This is before Zetwerk or after Zetwerk?
Prayank Swaroop 36:28
This is before Zetwerk. This is before Zetwerk.
Yes, Zetwerk did add a lot of confidence into me. And when you’re investing, it’s very hard. You don’t know because it takes 7 years before a company becomes big.
So I was like, maybe I’m not cut out for it. And then because at that time when I had joined during the initial few years, first 5 years, a lot of my peers had invested in companies that were doing well. And I was like, I don’t know whether I’m cut out for it.
And then I was having a chat with my wife and she said, you like it? I said, I like it. Would you go somewhere else?
I said, I can’t. It’s so much fun that I want to, she said just be patient. You know, this is a patience game..
And so I really credite to her that. And then I think the next couple of years, Zetwerk happened and I became a lot more confident. Then one other thing which happened was till that point of time, I used to follow a lot of what is happening in the US, what is happening, what my other peers are doing.
And like the VC group thing, everybody does the same thing. Then I said, yeah, like life should not be led that way. I want to do stuff which I am interested in.
So then I said, okay, let me do cybersecurity. And people said, there’s no company in India in cybersecurity. What are you trying to do?
All right. I said, no, when they will be, I’ll be there. And that’s what I want to achieve.
So if it’s not there, I’ll create it. So it’s hard. It’s not easy.
Even now, sometimes I feel when we are doing AI investments, we are actually chasing the US markets, right? I would love to invest in companies, we are ahead and we create the wave rather than follow the wave. So, and that is my aspiration right now.
If you ask me to in the next, you know, whatever working years live, like 20 years or 30 years, whatever I have, can I find those companies which become monumental? So that is a drive, right? So, yeah.
Siddhartha Ahluwalia 38:16
And what do you think are some of the positives and negatives of Indian VC ecosystem? I can share mine also.
Prayank Swaroop 38:23
Yeah, I’d love to know from you. You’ve interviewed so many people. You want to go first?
Siddhartha Ahluwalia 38:27
No, first you. I have asked the question.
Prayank Swaroop 38:30
I think there is still a lot of following what is happening in the US. I would love to have more original thinking. And it’s not just the VC’s problem also.
It’s, I think, a VC can only invest in the supply of what ideas they get. I think today, Indian VC is starved for amazing ideas. Amazing ideas.
I’ll give you an example in, for example, Accel Atoms. When we opened the first time AI cohort, we got some 900 applications from AI. And I think 500 of them were marketing AI companies, which had already happened in the US.
In terms of actual, original, very different ideas, maybe they were like some 20 ideas. And out of those 20, only one was commercially viable, which we invested in, right? So that is where the supply-demand gap is.
So that is one. But again, the second part is, I don’t know whether to blame the system or not. We are not, compared to the US, a very large ecosystem.
We get blamed a lot, right? That Accel, not just Accel, but like Indian VC’s don’t put a lot of money in companies. You’re putting only a million dollars, whereas my comparable is getting 10 million dollars.
So yeah, I mean, that is the reality of our ecosystem today. It will change in another three, four years. You know, people will start getting a lot more capital.
So yeah, I don’t know whether that is a problem or not. Yeah, I don’t know whether I answered your question properly.
Siddhartha Ahluwalia 40:03
Yeah, I can share my learnings, right? Yeah. So when I was a founder, the ecosystem has been collaborative, like founder sharing with other founders.
And when I became a VC, what I saw was very closed doors, because what has happened is, unlike Accel, like many of the Indian VC funds, they are built by ex, let’s say, consulting partners. Right? And what I saw was, you know, people, for example, LP is a very taboo topic.
So if I ask any VC, who are your LPs? They’ll not share. Unlike until, for example, we have Foundation Capital as an LP in Neon.
They have helped us to take us places, whereas they have zero incentive, right? But whenever I lead out to them for help. So similarly, I see that, you know, the ecosystem will only be developed when the larger VCs are only trying to help, you know, pull VCs like Neon or maybe earlier ones upward rather than trying to compete.
Prayank Swaroop 41:05
I think it’s fair.
Siddhartha Ahluwalia 41:07
And, you know, I even discussed the thought with my own LPs, like when Neon raises, let’s say, 100 mil next fund, we should just carve out some portion of it just to invest in other smaller VCs, less than 10 million, because else the ecosystem will not grow.
Prayank Swaroop 41:25
That’s a very interesting thought. I think so. So by the way, Accel has been an LP in Jungle Ventures, in Ideaspring Capital and in pi Ventures.
And with a similar thought process, we said, we might not be able to invest in some areas and we can go and invest in other VCs. So I think your thought is spot on. Though, I don’t want to defend any VC.
The VC ecosystem is definitely very competitive, because people have this key. This is the one good company. And if everybody gets to know about it, then what will happen, right?
Companies get bid up on price and all that. But I think as all VCs, the collective responsibility is to help educate the founder better. I like SaaSBoomi a lot, right?
So SaaSBoomi helps all founders. We need to have more such events more regularly. More VCs should come together and contribute.
I think Nikhil in Grayscale is doing a fantastic job. Those guys are doing Magic Ball and they’re collaborating with other VCs for the AI ecosystem. So we need to have more of those.
Yeah. I mean, how do we do it? I’m happy to collaborate with you guys.
Siddhartha Ahluwalia 42:36
Yeah, absolutely. We’ll look forward to. And I think to deepen even the ecosystem for the founders, it needs to be more collaborative capital rather than, you know, the traditional VC think of, let me keep this logo to myself.
Prayank Swaroop 42:49
So I like to co-invest. So I like to co-invest. One of my good successes is Slintel.
So Stellaris and Rajesh Sawhney GSF, they were investing a million dollars. I really liked the team. I said, guys, I’ll come in.
If you let me in, they let me in. So I’m very thankful to them. So we invested 300K from Accel.
And then the next round, we led with a 5 million check. And then, you know, the company went on to raise another 20, 25 million dollars more before the founders decided to sell the company. So I like to collaborate because thankfully, I am at Accel.
I have this vantage point that I don’t have a problem of money. I can invest and I’m happy to co-partner, you know.
Siddhartha Ahluwalia 43:35
Yeah. And as an investor, does it ever… You shared in your journey, right?
Before that all happened, it was too much pressure that your peers… Does it have pressure to invest along with legends like Shekhar? Because they have so many logos to their name.
Prayank Swaroop 43:51
Oh man, a lot of stress. So you walk into the office and so, you know, when I joined Accel, I was like, okay. I was completely new.
Software engineer turned product manager. Landed up here. Need to learn how VC works.
At that time, we just had Flipkart. And I didn’t really know. There was no term called Unicorn at that time.
Then as you mature a couple of years later, so we had Freshworks, Chargebee, you know, BookMyShow. So one after the other companies, and like I used to sit with… Anand is a couple of years senior to me.
Anand did Swiggy. Anand did BlackBuck, Spinny. Abhinav did Urban Company.
So at least in Accel, you know, almost every partner has a Unicorn. And some of them have like multiple Unicorns. And all of this has happened in a very short span of 14 years.
So it’s very daunting sometimes when you look around and say, should I be even here? You know, you have this imposter syndrome sometimes. But the great part of Accel is you learn and we are very collaborative.
So Shekhar will spend time with my companies and he will give me insights. So I learned from Shekhar. I learned from Subrata.
I learned from Abhinav. I learned from Anand. Like some of my companies, I should really thank Anand.
Like a couple of my companies, I almost gave up. I said, this company is not going to happen. And I said, hold on, don’t worry.
I’ll come in. I’ll help you. He worked with me.
He worked with the founders to stabilize the ship. So I think that is a good part of being maybe in a large VC or an experienced VC firm, where a lot of the situations are already seen by somebody else. And they come in and guide you.
So and in Accel, that knowledge gets shared. Now, I like to work with my younger team, even if they don’t want to. And that helps.
And then sometimes the actually the next generation of these VC, I think the next generation of VCs are going to be smarter than us. Because they have all of these patterns. They have a bunch of work done for them.
But they also are in understanding of what is happening on the market. Like I, to be honest, I don’t understand some of the Gen Z platforms to have come out. Right.
So I was in one of the ICs. I was discussing, why will anybody buy this? And all our associates and VPs, they said, Prayank, you have not gone out on Friday night to Indira Nagar.
So you have no idea how people dress. You know, like, yeah, that’s true. So and then we did that investment and the company has been doing phenomenally well.
So I think that’s the way it is. But yeah, sorry. Long winded answer.
Siddhartha Ahluwalia 46:34
And Accel, the partners, right? They have been old guards, right? And at some point in time, it will come to pass on the baton.
Prayank Swaroop 46:43
Yeah.
Siddhartha Ahluwalia 46:43
So is Accel India ready for that?
Prayank Swaroop 46:46
I think we are constantly debated. I think VC is a very long career. Because actually, in VC the knowledge compounds, experiences compound.
So yeah, I think we will be there for a long time. And Subrata and Prashanth and everybody else will be there for a long time as well.
Siddhartha Ahluwalia 47:05
I think globally, we have seen that happen in Sequoia, US. Yeah. Where Mike Moritz and the older guard were able to build the new partnership and nurture the new partnership, right?
But it’s a tough thing to do over a decade long journey.
Prayank Swaroop 47:25
So I think we have been taught. I think it’s definitely an apprenticeship model. Like every investment we do, I learn from each of the partners.
And we, I mean, that’s the culture which is set. That every company, we do retrospectives. Why did you?
Okay, so Shekhar, why did you invest in this company? And what’s wrong in this company now? And what could they have done better?
So we keep on learning. And I think it comes down to whether the senior partners are actually spending time and energy in coaching the junior partners. In fact, the associates.
Like if you come to our firm, you will find, for example, Subrata and Anagh working closely together. Like Bridgetown is a good example. Subrata and Anagh were working together closely on it.
If you look at Meragi, which is a weddings marketplace company, which we have done. So Prateek, who’s a principal and Prashanth, they have been working together on it. I already said Shekhar and I work very closely in a lot of companies.
So there is, or Abhinav and Rishika will work together on different companies. Like TrueMeds is a good example. Sarthak did a lot of work and Abhinav did a lot of work together.
So that’s the way we work. So we like to be very collaborative. The other interesting thing, which I didn’t cover in the culture aspect is we don’t have swim lanes.
So most funds tend to have specialists and that creates boundaries, right? So people will say, okay, you are a SaaS team. And they’ll only look at SaaS.
In Accel, any investor can do anything. Like tomorrow, if I want to wake up and say, hey, I want to do a material sciences company, I can do that. Or I can go and do a consumer company.
I can do that. So Accel, that way, we have a lot of, I would say, polyglot investors. They see different patterns in different places.
For example, working capital. It’s a very common thing in B2B marketplaces. And that is now something which we can go and see in deep tech and understand, right?
So I think those kinds of things work in Accel’s favor also. But to your first fundamental question, the responsibility of us, just like you said, right? In the ecosystem also, when a senior VC teaches the junior VC, similarly, a senior partner has to spend time.
And they can’t just be investing, investing, investing. So the ownership and onus is on them that they have to do it.
Siddhartha Ahluwalia 49:46
So then if there are no sector-specific boundaries, then how do you make sure that, let’s say, if X is sourcing the company, then X is leading the company or Y is leading the company?
Prayank Swaroop 49:58
So it comes down to who has two parts, who has done the most amount of hard work and who has the most conviction. Because even sometimes there might be areas where I might have done the hard work, spend a lot of time with the company, but I don’t have the conviction. I think there is something missing in the company.
So what I would do at that point of time is I just write a mail to the partnership, to all the IMs. Hey, you know, I met this company. I like everything except these three things. I think it’s a good team.
They should raise capital, if not from somebody. Would anybody else like to spend time? And then people say, hey, if nobody’s interested, then obviously it goes off.
But if somebody is interested, then people do. And that is the way a lot of us have actually done some of these investments also. And in AI also that has happened because in AI, actually AI is a very good example.
Things are moving so fast, right? Not everybody can be on top of everything. So somebody sources, but somebody else has spent time on that space.
Then we just say, hey, you are the most knowledgeable. Please go spend time. And if you like it, you do it.
So that’s the way it’s working right now. Yeah.
Siddhartha Ahluwalia 51:05
Thank you so much, Prayank. It’s been a pleasure hosting you on the podcast. Thank you for sharing everything candidly, your experiences, your knowledge.
Prayank Swaroop 51:14
I’m very excited to be here. It’s a, you guys have a lovely house. Thank you for asking all those questions.
Hopefully it’s useful for the audience.
Siddhartha Ahluwalia 51:23
No, definitely. I think I find it very useful as a VC. And if I were an entrepreneur, it gives me a clear cut model on how Accel operates, how we should reach out to Accel.
Prayank Swaroop 51:32
Yeah. Yeah. Thank You.
Siddhartha Ahluwalia 51:33
Thanks a lot.
Prayank Swaroop 51:34
Thank you. Yeah. Awesome.