Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Anand Daniel of Accel Partners was recorded in May 2016.
Anand Daniel, Partner with Accel Partners, discusses Accel India’s investment strategy at length.
Sramana Mitra: I’m sure you have an extensive analysis of the Indian market at this point. It would be great for our audience to have some view into how you are thinking about your investment focus today. What stage? What sector? What are your geographical constrainst? How are you thinking about the global opportunity versus the India-facing opportunity?
Anand Daniel: Accel started in India about 10 years ago. We started as a small fund and joined Accel family in 2008. Since then, we’ve raised three funds. In India, we have close to a hundred companies. We predominantly do seed and early stage investing. Seed would be a million dollars and Series A would be slightly more than that. I’ve been fortunate to be part of the team here for the past six years. I’ve moved back to the US.
We invest broadly across three categories. One is on the consumer side. Most of these are technology-enabled consumer-facing companies. We can discuss a few as we go along. About half our portfolio is in that category and the other half is split across business to business companies. Some of those could be aimed at Indian businesses solving problems for Indian businesses using technology. Another portion of that is sitting out of India but solving problems for the global businesses.
Finally, we have healthcare technology. We invest across diagnostics and devices. These are probably the broad sectors that we’ve been investing in. Early in our journey, we were investing in non-technology companies. As things evolved, we saw enough activity in the technology sector. Over the past five or six years, we’ve been focusing on tech-enabled companies.
Sramana Mitra: We’ll get into some of the things that you mentioned you want to get into. Let’s start with how do you analyze the trends and the current situation in the Indian market. What do you see are exciting areas that are going to create large companies from your point of view?
Anand Daniel: From a trends perspective, what has changed is, entrepreneurship has become aspirational now. It used be difficult to get young people to try out entrepreneurship. Recruiting people into startups used to be really difficult. That has changed in the past five to six years. More and more young people want to get into entrepreneurship. From an opportunity point of view, we believe there are opportunities across all the sectors we talked about.
Most of our consumer companies are focused excessively on India. Many of the entrepreneurs solving problems here are really young entrepreneurs. India is known more as a technology outsourcing hub globally thanks to all our big IT services companies.
What India was not known for earlier was coming up with what to build and having the product management talent to figure out what market opportunities are there. That has evolved over the past 10 years. Now Indian product managers, especially those that have been trained in the US, have become good in identifying gaps in products globally.
An example is Freshdesk. This company started out identifying a product gap in the customer support software space and built the product out of Chennai. They are now present across the globe. Most of the tech talent still sits out of Chennai.
Sramana Mitra: Freshdesk was incubated in One Million by One Million.
Anand Daniel: That’s awesome. Then the same thing is happening in healthcare. There are experienced entrepreneurs coming out of companies like GE. They pick problems that are uniquely Indian and are largely prevalent in India. They solve those problems and get to market. They are able to take that globally as well. All these are exciting areas for Accel and for us to be investing in.