Accel's Atoms accelerator program shifts gears towards AI and Industry 5.0 thematic cohorts

Venture capital firm Accel has announced a shift in focus for its accelerator program, Atoms. After completing two sector-agnostic cohorts, the program is pivoting towards thematic cohorts starting with Artificial Intelligence (AI) and Industry 5.0. This change aims to provide start-ups with more targeted resources and mentorship to help them succeed in these rapidly evolving sectors.

Another significant change is that the program, which offered $250,000 pre-seed capital to selected start-ups as an "uncapped convertible note", will now primarily offer up to $500,000 in equity investments.

“One very big change from last year is that we have decided to do equity investments, and not just uncapped convertible notes. We realized a lot of times founders looked at it as a grant, they felt we have not been serious about it, they felt Accel is taking optionality value check. We spoke to founders and a majority of them are perfectly fine with having it in equity, they felt it brings seriousness from our part. So we are now going to invest in these companies and take equity ownership,” Prayank Swaroop, Partner at Accel, said.

Talking to Business Today, Accel partner Barath Shankar Subramanian, who heads the Industry 5.0 program said the restructuring is aimed at offering personalized learning and real-time feedback for start-ups. According to him, by grouping companies thematically, the program can draw in sector-specific mentors and provide more targeted resources to address industry-specific challenges. 

In Industry 5.0, Subramanian said the program will focus on software companies that are trying to redefine how traditional industries like manufacturing or oil & gas use technology besides looking for marketplaces in the sector. 

Swaroop who leads the AI program said Atoms will evaluate companies that are using AI innovatively for business applications as well as companies that are building development tools for the AI ecosystem. Accel has invested in AI companies in the past like Spyne.ai, DubDub, Mihup, Effectiv, Scale.ai, and Akridata. 

The partners said Atoms has become federated, meaning any partner within Accel who is interested can launch and run an Atoms program. With this move, Accel is opening up the opportunity for multiple programs to run simultaneously, potentially expanding the reach and impact of the accelerator. 

Each co-cohort will have 3-5 start-ups. Applications will open by the end of May and the finalists will be announced by November. Investments will be made during this time.

Over two cohorts, Atoms has invested in 24 startups ranging from SaaS, B2B marketplaces, Web3, D2C, hardware, health & wellness, to hardware and e-commerce. Since joining the Atoms program, these startups have further raised over $160mn, with Accel leading or participating in follow on rounds.