Four years ago, two technology industry veterans, Prashanth Prakash and Subrata Mitra, cashed out of Net Kraft and Tavant Technologies, respectively, and decided to explore the early-stage venture and seed capital industry. Rather than launch a formal seed fund, the duo decided to cut their teeth and set up an Investment Club, gathering money from friends in the industry, angel investors and high net worth individuals to invest in five earlystage investments. After muddling through these first five investments in IT (and getting their hands dirty by being closely involved in their day-to-day operations), the duo decided to set up their first formal fund of $10 million, with the likes of Infosys co-founder N.S. Raghavan, IT industry maven Prakash Bhalerao and New Silk Route’s Parag Saxena as investors.
Accel’s Prakash: Early stage focus
Now, four years and fifteen investments (and two partners) later, the foursome have sold their early-stage focussed VC firm to Accel, a 25-year-old VC firm that has backed the likes of Veritas Software, Real Networks, Macromedia and Foundry Networks. “This is critical for us to step up our focus on the start-up market,” says Prakash, adding, “we will now set up our second fund of around $60 million, which should close by the third or fourth quarter of this year.” Despite the broader focus of Accel, Erasmic (now renamed Accel India) will continue to retain its early-stage focus.
“This market is vastly underserved, although there are literally dozens of VCs in later-stage investments,” says Prakash. According to him, Accel India will focus on around 30 deals, starting with small investments of around $500,000 and increasing funding based on business requirements. “We believe that there are many opportunities beyond IT and software products in markets such as KPO, life sciences, Internet, mobile and consumer businesses that are just beginning to take off,” says Prakash. If the man sticks to his word, then the Accel+Erasmic equation may work to the advantage of many wannabe entrepreneurs.