scorecardThe next Flipkart or Swiggy will come from AI or Industry 5.0, says Accel’s Barath Subramanian
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The next Flipkart or Swiggy will come from AI or Industry 5.0, says Accel’s Barath Subramanian

The next Flipkart or Swiggy will come from AI or Industry 5.0, says Accel’s Barath Subramanian
Business4 min read
Barath Shankar Subramanian, Partner, Accel India
  • Accel’s accelerator programme has pivoted to focus on two themes for early stage startups as it believes the opportunities are large in India and outside.
  • So far, AI has been used to analyse and predict consumer behaviour, but Accel expects new startups that will help redefine the entire customer journey using AI.
  • If the economy has to double in the next ten years, then manufacturing will play a big role.


As the third largest startup ecosystem in the world, India is home to more than 90,000 startups at the start of 2023. But the one question on top of everyone’s mind is: Where will the next Flipkart or Swiggy come from? With the era of easy money gone, the entire ecosystem – entrepreneurs, angel investors along with venture/private equity funds – are more interested in business models and path to profitability than they were ever before. Accel India, a leading venture capital firm that works with founders from seed to scale stages, has identified two key themes – AI and Industry 5.0 – as their next big bets. Accel should know this because the firm has invested very early on in startups like Flipkart, Swiggy, Freshworks and Zetwerk.

The global venture firm is taking a structured approach to pursue opportunities that it believes will be very big in the next seven to ten years. Accel’s accelerator programme, Atoms 3.0, which it launched in 2021 has also pivoted from a horizontal programme to a thematic one. Says Barath Shankar Subramanian, partner at Accel, “Both these are here and now opportunities. Atoms gives us that early window into identifying some of those opportunities that will be relevant 7-10 years down the line because it is an early stage programme.”

Accel launched its Atoms 3.0 in 2020 and so far two of its cohorts have raised $160 mn across 24 startups. In its third edition, the programe has been tweaked to focus on AI and Industry 5.0. This has been done after taking feedback from the entire ecosystem such that the programme could meet the needs of founders. Both these themes are here and now opportunities and the Atoms 3.0 gives the venture firm an early window into these opportunities that would become big 7-10 years down the line.

Accel is not wrong in its choice of themes as both have immense potential. Since November 2022, generative AI (artificial intelligence) has touched the lives of students, elderly and consumers in many different ways. While students can get answers to their questions late into the night, stock market traders are asking AI powered astrology apps on what the stars foretell. Beyond the fun aspects, AI will transform B2C platforms and their interfaces. So far, AI has been used to analyse and predict consumer behaviour, but Accel expects new startups that will help redefine the entire customer journey using AI. In its blog, Seed to Scale, Accel says that it anticipates the birth of transformative consumer startups redefining how businesses can cater to both consumer needs & desires.


Manufacturing – the other theme that Accel is betting on – is already the talk of town. Accel has already made investments in ten companies in the Industry 5.0 space, with Zetwerk and Detect Technologies being its most successful bets. Explains Subramanian, “If the economy has to double in the next ten years, then manufacturing will play a big role. There are a lot of tailwinds to why manufacturing will take off in India. These opportunities will be both brownfield and greenfield. Because of what has happened in India on the digital side over the last ten years, we are seeing that there is a market and the proxy for that is looking at digital transformation spending. The new age greenfield manufacturing facilities that will have to focus on digital from day one. These tailwinds are at play.”

The VC firm is certain that manufacturing in India is a long-term trend and both existing manufacturing companies and new age ones will have to digitise their operations. What the Atoms Programme does is to help the new startups attain scale much faster as it has thanks to the learnings they have from the earlier investments. Accel now does not need to reinvent the wheel as its Atoms 3.0 is customised for founders in India. Adds Subramanian, “A lot of thought goes into a new vertical since we are still looking for the next large company coming out of India. The next Flipkart and Swiggy will come from AI or Industry 5.0.”

“While many in the industry see Industry 5.0 as the SaaS for manufacturing, Subramanian says that while it may look like that but it is not. The next wave of companies in this space will be more enterprise-led and solutions will be co-created with large companies. Large enterprises in manufacturing spaces outside India have been slower to move as they are dealing with legacy systems. There is an opportunity in India here and now, which can later be taken outside India as well over time”, Subramanian adds.

Accel has categorised the opportunity into three baskets – people, processes and machines – and any opportunity that interjects one of these or a combination of these is 5.0 for Accel. One of its portfolio companies is a good example of what startups can do in the space without actually setting up factories. Detect Technologies partners with the companies to reduce safety violations on a consistent basis. In the past, there would be cameras and people would monitor it manually, but this process can be machine-led and companies are willing to pay for it.

Going forward, Accel is of the view that real businesses that make money will come from these verticals. Accel has five focused verticals – consumer, B2B, SaaS, fintech and digital health. Largely, everything the VC firm has done fits into these categories. It’s philosophy too has not changed, which is to catch startups young and to stay with them for the next ten years or so.

Accel’s past record shows that it has managed to identify the right themes ahead of others. Its Fund II was largely focused on horizontal marketplaces, while Fund III (2012) was about SaaS companies. Its Fund IV took bets on consumer services startups like Swiggy and Urban Company, while Find V was B2B marketplaces. Now Fund VI is doubling down on B2B marketplaces and horizontal SaaS opportunities. “At the simplest level, we work on global themes and then we double down on it if we see India is ahead of that trend,” adds Subramanian.

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