Why do Accel Partners want to invest more in ecommerce?

Investors have been pumping millions into the Indian ecommerce companies, especially this year. Potential is of course the primary reason for it, but how do they see it?

Accel Partners to invest more

Accel Partners India is one of the most prominent investors in Indian ecommerce. It backs players like Flipkart, Bookmyshow and TaxiForSure. According to people familiar with the company’s plans, it is set to raise about $250 million in funds, as the company is keen to invest more in potential ecommerce companies and technology start-ups.

“For its ongoing investments, Accel has started committing money which will come from its new fund. The old fund is exhausted. Only the paperwork is remaining for the new fund,” said one of the people.

Investors find ecommerce hot

The exponential growth of ecommerce in 2014 is what triggered the investments in the sector this year. Rapid sales experienced by Flipkart and Snapdeal, coupled with the increasing valuations attached with these companies reflected the growing popularity of online shopping with consumers.

It’s interesting that Accel hasn’t pumped funds into Flipkart on a pro-rata basis. Its current stake in Flipkart is much lower than it was 2008 when it started funding Flipkart. However, considering other investors, Accel has made some of the wisest bets in Indian ecommerce, including the following:

• Flipkart, now valued at USD 7 billion (or USD 10 billion soon)
  
• Myntra, acquired by Flipkart
• Bookmyshow, valued at above USD 170 million

The venture capital firm’s US parent Accel Partners is one of the most prominent investors in Silicon Valley. It’s significant investments include Facebook, Dropbox, Spotify etc.