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Tag: Accel

  • Sapiom raises $15M to help AI agents buy their own tech tools | TechCrunch

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    People without coding backgrounds are discovering that they can build their own custom apps using vibe coding — solutions like Lovable that turn plain-language descriptions into working code.

    While these prompt-to-code tools can help create nice prototypes, launching them into full-scale production (as this reporter recently discovered) can be tricky without figuring out how to connect the application with external tech services, such as those that can send text messages via SMS, email, and process Stripe payments.

    Ilan Zerbib, who spent five years as Shopify’s director of engineering for payments, is building a solution that could eliminate these back-end infrastructure headaches for nontechnical creators.

    Last summer, Zerbib launched Sapiom, a startup developing the financial layer that allows AI agents to securely purchase and access software, APIs, data, and compute — essentially creating a payment system that lets AI automatically buy the services it needs.

    Every time an AI agent connects to an external tool like Twilio for SMS, it requires authentication and a micro-payment. Sapiom’s goal is to make this whole process seamless, letting the AI agent decide what to buy and when without human intervention.

    “In the future, apps are going to consume services which require payments. Right now, there’s no easy way for agents to actually access all of that,” said Amit Kumar, a partner at Accel.

    Kumar has met with dozens of startups in the AI payments space, but he believes Zerbib’s focus on the financial layer for enterprises, rather than consumers, is what’s truly needed to make AI agents work. That’s why Accel is leading Sapiom’s $15 million seed round, with participation from Okta Ventures, Gradient Ventures, Array Ventures, Menlo Ventures, Anthropic, and Coinbase Ventures.

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    “If you really think about it, every API call is a payment. Every time you send a text message, it’s a payment. Every time you spin up a server for AWS, it’s a payment,” Kumar told TechCrunch.

    While it’s still early days for Sapiom, the startup hopes that its infrastructure solution will be adopted by vibe-coding companies and other companies creating AI agents that will eventually be tasked with doing many things on their own.

    For example, anyone who has vibe-coded an app with SMS capabilities won’t have to manually sign up for Twilio, add a credit card, and copy an API key into their code. Instead, Sapiom handles all of that in the background, and the person building the micro-app will be charged for Twilio’s services as a pass-through fee by Lovable, Bolt, or another vibe-coding platform.

    While Sapiom is currently focused on B2B solutions, its technology could eventually empower personal AI agents to handle consumer transactions. The expectation is that individuals will one day trust agents to make independent financial decisions, such as ordering an Uber or shopping on Amazon. While that future is exciting, Zerbib believes that AI won’t magically make people buy more things, which is why he’s focusing on creating financial layers for businesses instead.

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    Marina Temkin

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  • Sources: Project SGLang spins out as RadixArk with $400M valuation as inference market explodes | TechCrunch

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    A pattern is emerging in the AI infrastructure world: popular open source tools are transforming into venture-backed startups worth hundreds of millions of dollars. The latest example is RadixArk, the commercial company behind SGLang, an increasingly popular tool that helps AI models run faster and cheaper.

    RadixArk was recently valued at about $400 million in a funding round led by Accel, according to two people familiar with the matter, a notable amount for a startup that was only announced last August. TechCrunch could not confirm the size of the funding.

    The news comes as some of the team responsible for maintaining SGLang, which is used by companies like xAI and Cursor to accelerate AI model training, has transitioned to the recently launched commercial startup. RadixArk originated as SGLang in 2023 inside the UC Berkeley lab of Databricks co-founder Ion Stoica.

    The startup previously raised angel capital from investors, including Intel CEO Lip-Bu Tan, the people said.

    Ying Sheng, a key contributor to SGLang and a former engineer at xAI, left Elon Musk’s AI startup to become the co-founder and CEO of RadixArk, according to a LinkedIn announcement she made last month. Sheng was previously a research scientist at Databricks.

    RadixArk’s Ying Sheng, Accel, and Lip-Bu Tan did not respond to a request for comment.

    Both SGLang and RadixArk focus on optimizing inference processing — essentially allowing models to run faster and more efficiently on the same hardware. Together with model training, inference represents a large portion of the server costs associated with AI services. As a result, tools that optimize the process can create enormous savings almost immediately.

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    RadixArk isn’t alone in making this transition from open source project to well-funded startup. vLLM, a more mature project for optimizing inference, has also made the leap. The newly formed company has had conversations about raising upwards of $160 million in funding at a valuation of about $1 billion, Forbes reported last month.

    Three people familiar with that deal tell TechCrunch that Andreessen Horowitz is leading the investment into vLLM, though the final numbers of that investment remain to be seen. Andreessen Horowitz declined to comment. vLLM co-founder Simon Mo characterized the information about this round “factually inaccurate” in a statement to TechCrunch, though he declined to specify which details were incorrect.

    Like SGLang, vLLM was incubated in Ion Stoica’s lab at UC Berkeley. Stoica, a professor at UC Berkeley, is the famed co-founder of Databricks as well as a number of other startups.

    Several large tech companies already run their inference workloads using vLLM, and SGLang has also gained significant popularity over the last six months, Brittany Walker, a general partner at CRV, told TechCrunch. Her firm did not back either company.

    RadixArk is continuing to develop SGLang as an open source AI model engine. The startup is also building Miles, a specialized framework designed for reinforcement learning, which allows businesses to train AI models to become smarter over time.

    While most of its tools remain free, RadixArk has started charging fees for hosting services, a person familiar with the company told TechCrunch.

    Startups providing inference infrastructure for developers have seen a surge in funding in recent months, underscoring the continued importance of the inference layer for AI. Baseten recently secured $300 million at a $5 billion valuation, The Wall Street Journal reported on Tuesday. This follows a similar move by rival Fireworks AI, which raised $250 million at a $4 billion valuation last October.

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    Marina Temkin

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  • India’s Spinny lines up $160M funding to acquire GoMechanic, sources say | TechCrunch

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    Spinny, an Indian online marketplace for used cars, is raising around $160 million as it moves to acquire car services startup GoMechanic, TechCrunch has learned.

    The Series G round, which includes a mix of primary and secondary transactions, would value the 10-year-old startup at about $1.8 billion post-money, three people familiar with the matter said, broadly in line with its previous valuation.

    Nearly $90 million of the round is primary, people said; Existing investor Accel has already wired about $44 million of that amount, with some details of the investment appearing in regulatory filings in India this week, which Indian outlet Entrackr first reported. A new investor is participating in the remaining portion of the primary, but TechCrunch could not confirm its specifics.

    WestBridge Capital is doubling down in the new round with a check of a similar size to its previous investment, the people said. The firm invested about $35 million to $40 million in Spinny’s Series F round earlier this year.

    Much of the secondary portion of the transaction is being sold by Indian VC firm Fundamentum, according to the people, while Blume Ventures is also expected to pare part of its stake.

    Accel, Fundamentum, and Blume Ventures did not respond to requests for comments. WestBridge Capital declined to comment.

    In March, Spinny raised $131 million in the first part of its Series F round led by Accel, with participation from Fundamentum, before expanding the raise to about $170 million in June to include WestBridge Capital. Those funds were earmarked to scale Spinny’s core used-car business.

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    However, the new round is being raised specifically to finance the acquisition of GoMechanic and invest in its platform, without drawing on the startup’s existing cash reserves, the people said. Earlier reports suggested Spinny could buy GoMechanic for around ₹4.5 billion (approximately $49.70 million) in a cash-and-stock deal.

    A consortium led by Lifelong Group acquired GoMechanic in 2023 after the startup admitted to “grave errors” in its financial reporting. The startup had previously been backed by high-profile investors, including Sequoia Capital, Tiger Global, and SoftBank.

    For Spinny, acquiring GoMechanic would deepen its control across the used-car value chain. The Gurugram-based startup has built a large consumer-facing business, selling about 13,000 used cars a month, primarily directly to buyers and, to a lesser extent, to dealers through its auction platform. Spinny operates its own large reconditioning centers to refurbish vehicles before sale and relies on third-party service shops for after-sales servicing of customer cars — a gap GoMechanic could bring in-house.

    GoMechanic would also act as a “two-way” funnel for Spinny, a person familiar with the matter said. The platform would service vehicles bought or sold through Spinny, and help attract car owners who may not yet be customers. That could help expand Spinny’s vehicle supply without significantly increasing customer acquisition costs.

    The acquisition comes as India’s used-car market is projected to grow at a compound annual growth rate of about 10% to roughly 9.5 million units by 2030, from nearly 6 million units today, per a recent report by Mahindra First Choice and Volkswagen Pre-owned Certified.

    The GoMechanic deal would mark Spinny’s latest move to broaden its footprint in India’s automotive market. In recent months, the startup has expanded beyond used-car sales by acquiring auto publications Autocar India, Autocar Professional and What Car? India from London-based media group Haymarket, and by launching a non-banking finance company, Spinny Capital, to offer vehicle loans to customers.

    Spinny co-founder and CEO Niraj Singh declined to comment.

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    Jagmeet Singh

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  • Google teams up with Accel to hunt for India’s next AI breakouts | TechCrunch

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    Google has partnered with Accel to find and fund India’s earliest-stage AI startups in a first-of-its-kind collaboration for the Google AI Futures Fund, launched earlier this year.

    On Tuesday, Accel and Google announced a partnership to jointly invest up to $2 million in each startup through Accel’s Atoms program, with both firms contributing up to $1 million. The 2026 cohort will focus on founders in India and the Indian diaspora building AI products from day one.

    “The thought process is building AI products for billions of Indians, as well as supporting AI products built in India for global markets,” Prayank Swaroop, a partner at Accel, told TechCrunch.

    India is an appealing market with the world’s second-largest internet and smartphone base after China and its deep engineering talent. Still, it’s also a country that lacks frontier model development and hasn’t produced many companies pushing the technical frontier of AI, where development remains concentrated in the U.S. and China.

    Activity is starting to shift, however, as major firms including OpenAI and Anthropic have recently announced offices in the country, and global investors step up early-stage commitments. The bet is that a large, mobile-first population, expanding cloud infrastructure, and relatively low software costs could turn India into a meaningful AI market — if the ecosystem can translate talent and demand into original research and products.

    Swaroop said investments will be geared toward just about any area: creativity, entertainment, coding, and work. “The future of work here is more encompassing, which is essentially SaaS, and all other applications,” he told TechCrunch. “It could even be foundational models.”

    Swaroop said the firms will also try to identify areas where large language models are likely to advance over the next 12-24 months and look for Indian startups building in those directions.

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    Alongside capital, founders will receive up to $350,000 in compute credits across Google Cloud, Gemini, and DeepMind, as well as early access to Gemini and DeepMind models, APIs, and experimental features. The program will include support from Google Labs and DeepMind research teams, co-development opportunities, monthly mentorship with Accel partners and Google technical leads, and immersion sessions in London and the Bay Area, including Google I/O. Founders will also get marketing support through Accel and Google’s global channels, as well as access to the Atoms founder network and Google’s AI builder ecosystem, the companies said.

    “India has an incredible history of innovation, and we firmly believe that its founders are going to be playing a leading role in the next generation of AI-led global technology,” Jonathan Silber, co-founder and director of the Google AI Futures Fund, told TechCrunch. “This is the Futures Fund’s first such collaboration anywhere in the world, and we chose India for a reason. Google has been a committed partner in the country’s journey to digital transformation, with multibillion-dollar investments over the years.”

    The partnership follows Google’s recent $15 billion plan to build a 1-gigawatt data center and AI hub in India. The company also announced a $10 billion digitization fund in 2020, which has backed firms including Bharti Airtel, Reliance Jio, and Walmart-owned Flipkart. Last month, Google partnered with Reliance to offer millions of Jio users free access to AI Pro.

    Google launched the AI Futures Fund in May as a dedicated vehicle to invest in and collaborate with AI startups globally. It has backed companies including Replit and Harvey, and has also invested directly in Indian startups such as Toonsutra and STAN.

    Silber told TechCrunch that Google would appear on the cap tables of startups funded through the partnership and would be “a material presence,” but declined to share how its equity stakes would compare with Accel’s.

    “This is our attempt to work with the market leader in the space who knows the country incredibly well, that can get us talking to earlier-stage founders at an early informative stage, that can move the needle,” Silber said.

    While using Google products is, perhaps, a given for applicants to this program, both Silber and Swaroop told TechCrunch there would be no requirements for startups to exclusively use Gemini or any other Google product.

    “Sometimes, Google’s technology is the best. Other times, you’ll see Anthropic or OpenAI. So, we’re not putting firm requirements that say you can only use Google’s models,” said Silber. “What we’re hoping to do, though, is find a couple of different unique integrations that we can do with these companies that leverage Google AI technology.”

    Launched in 2021, Accel’s pre-seed and seed platform, Atoms, has backed more than 40 companies that have collectively raised over $300 million in follow-on funding. The firm expanded the program this year to include Indian-origin founders based overseas.

    The latest collaboration comes days after Accel’s partnership with Prosus to co-invest in Atoms X, backing early-stage Indian founders building large-scale solutions with the potential to serve the masses in the country.

    Silber told TechCrunch that Google is not structuring the partnership as a pathway to future acquisitions, or even future cloud customers.

    “We’re not a sales team, so we’re not specifically looking to sign up new cloud customers. That’s not our goal,” he said. “In terms of KPIs, our objective is simply to see the next wave of innovation in the AI space coming out of India.”

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    Jagmeet Singh

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  • Accel and Prosus team up to back early-stage Indian startups | TechCrunch

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    Storied investors Accel and Prosus have launched a new investment partnership to back Indian startups from day zero, targeting founders building large-scale solutions with the potential to serve the masses in the South Asian nation.

    Announced on Monday, the collaboration marks the first time Prosus is investing at the formation stage. Both firms will co-invest from a startup’s earliest days, with a focus on companies addressing systemic challenges across sectors such as automation, energy transition, internet services, and manufacturing.

    India, the world’s most populous country with over 1.4 billion people, is seeing rapid growth in its digital economy. The country has more than a billion internet users and over 700 million smartphone users, making it the second-largest smartphone market after China. The Indian government-backed platforms such as the Unified Payments Interface (UPI) and Aadhaar have created a digital infrastructure that enables startups to build and scale services quickly. Yet much of India’s startup activity to date has focused on adapting global business models, with fewer companies tackling large-scale domestic challenges. The Accel–Prosus alliance is looking to change that.

    The partnership expands Accel’s early-stage founder program, Atoms X, launched in July to back what the firm calls “leap tech” startups — companies working on large-scale, systems-driven problems.

    “We feel now the time is right for the Indian startup ecosystem to move from adapting global businesses to creating Indian models that help India leapfrog its journey in becoming a developed country,” said Pratik Agarwal, a partner at Accel, in an interview.

    He added that startups working on population-scale solutions often struggle to raise sufficient early capital, given their long gestation periods and the risk of heavy dilution before reaching meaningful traction.

    “Hopefully, we are bringing a lot more early capital to them at the right time so that they can make substantial progress without going through several rounds of false starts before they make progress,” he told TechCrunch.

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    Under the partnership, Prosus has committed to match Accel’s investment in each company, with initial checks ranging from $100,000 to $1 million — a figure that could increase over time.

    “We could both continue to do our own things in this space, but given how large the ambition is with these founders, and given how difficult a problem that they are trying to solve, it made all the sense for us to put our resources together,” said Ashutosh Sharma, head of India ecosystem at Prosus.

    Traditionally, Prosus has focused on late-stage investments globally. The Amsterdam-headquartered firm counts Swiggy, Meesho, and PayU among its key investments in India.

    While Prosus has committed to matching Accel’s investment in this partnership, Sharma indicated it is not seeking an equivalent equity stake.

    “For us, getting that equity in the first round is not important at all,” he told TechCrunch. “If we can truly identify a Swiggy, a Meesho, an iFood, or a Tencent of tomorrow — today — that is success enough.”

    The partnership also broadens the scope of Accel and Prosus’s activity in India. In recent months, the two firms have co-invested in startups such as AI-powered tutoring platform Arivihan and low-cost internet service provider Wiom.

    “Because of this AI-led disruption that is happening around us, some countries will be disproportionate beneficiaries of this — and some countries will be disproportionate net, net losers,” said Sharma. “Two countries that seem very placed to be beneficiaries are the U.S. and China. Now in that world order, and in that world narrative, what is India’s space? And can India, therefore, as part of this ‘leap tech’ revolution, find the rightful place, not just in AI, but beyond AI, is the other, let’s say, ambition that we have with this program.”

    The alliance comes amid growing geopolitical tensions that have disrupted capital flows, technology supply chains, and market access — prompting global investors to reassess where capital can be deployed safely and at scale. With a large domestic market, expanding digital infrastructure, and a deepening pool of technical talent, India is increasingly seen as a strategic priority in this landscape.

    “India’s place in the global economy and the geopolitical system is such that India needs to chart and accelerate its path like a self-sovereign, independent, developed country,” Agarwal told TechCrunch.

    Accel has already backed more than 40 startups through its early-stage program, Atoms. Over 30% of them have gone on to raise follow-on funding from external investors, with Accel itself leading more than half of those rounds.

    VC funding in India fell 25% year-over-year to $4.8 billion in the first half of 2025, per Tracxn, with late-stage deals dropping 27% to $2.7 billion and early-stage funding down 16% to $1.6 billion.

    Still, India remains a key focus for global investors, driven by its large population and expanding digital adoption. In September, eight U.S. and Indian VC and private equity firms — including Accel, Blume Ventures, Celesta Capital, and Premji Invest — formed a coalition to back deep tech startups with over $1 billion in commitment. The Accel–Prosus partnership is the latest example of how global VCs continue to place long-term bets on India.

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    Jagmeet Singh

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  • India’s Urban Company soars 58% above IPO price in year’s most subscribed offering | TechCrunch

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    Urban Company, India’s largest home services platform, stormed onto the public markets on Wednesday, opening 58% above its issue price after delivering the country’s most subscribed IPO of the year.

    The Gurugram-based startup, which connects users to at-home services ranging from beauty treatments to appliance repair, debuted on the Mumbai-based National Stock Exchange at ₹162.25 per share (approximately $1.84), up from its IPO issue price of ₹103. The offering, which opened last week, was subscribed over 100 times, meaning investors placed orders for 100 times more shares than were available, signaling robust demand from both institutional and retail investors.

    Urban Company’s public listing has also served as a partial exit opportunity for its early backers, with Accel reaping the largest gains, followed by Elevation Capital and Tiger Global. Accel, which invested at an average cost of ₹3.61 per share, is sitting on potential profits of nearly 45x, while Elevation, with an entry price of ₹5.39 per share, stands to make around 30x and Tiger Global is looking at comparatively modest gains, reportedly around 1.3 times its cost basis.

    One of the key reasons behind Urban Company’s success over the past decade has been its ability to organize traditionally unorganized household services in India — including cleaning, plumbing, electrical work, massage, and beauty treatments. By digitizing these offerings through its app, the company has created an on-demand platform in a market that lacked standardization. In that sense, Urban Company enjoys a near monopoly, remaining the largest organized player in this space.

    Before kicking off the $217 million public offering, Urban Company raised $97 million from anchor investors, including Goldman Sachs, Dragoneer Investment Group, Norges Bank, GIC, Nomura Amundi Funds, Steadview Capital, Prosus, and WhiteOak. Domestic mutual funds including SBI Mutual Fund, ICICI Prudential, Nippon, and UTI also participated in the pre-IPO secondary round.

    Founded in November 2014 as UrbanClap by Abhiraj Singh Bhal, Varun Khaitan, and Raghav Chandra, Urban Company operates in 59 cities across four countries, including India, the UAE, Singapore, and Saudi Arabia — with India remaining its largest market so far. The company plans to enter more than 200 cities by the end of fiscal year 2030 to expand the reach of its household services.

    Urban Company aims to utilize the net proceeds primarily for technology development and cloud infrastructure, along with lease payments for office spaces and marketing initiatives.

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  • U.S. and Indian VCs just formed a $1B+ alliance to fund India’s deep tech startups | TechCrunch

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    Eight U.S. and Indian venture capital and private equity firms — including storied investors Accel, Blume Ventures, Celesta Capital, and Premji Invest — have formed an unusual coalition to back India’s deep tech startups, pledging more than $1 billion over the next decade to strengthen U.S.-India tech ties.

    The alliance addresses longstanding funding concerns. In April, Indian Commerce Minister Piyush Goyal drew criticism after slamming domestic startups for focusing on food delivery instead of innovation, contrasting them with Chinese firms in a presentation titled “India vs. China: The Startup Reality Check.” Several investors and founders countered that India lacks capital for deep tech ventures and said Goyal’s comments overlooked the determination of founders building for the local market. The new alliance appears to address these concerns, aiming to channel long-term private capital into deep tech ventures that many founders say have struggled to secure funding in India.

    The move stands out because investors typically compete for deals rather than formally band together under a named alliance with binding pledges. While VCs often co-invest on a deal-by-deal basis, most cross-border collaboration occurs informally through individual fund strategies, rather than through coordinated capital blocs.

    Called the India Deep Tech Investment Alliance, the group brings together Celesta Capital, Accel, Blume Ventures, Gaja Capital, Ideaspring Capital, Premji Invest, Tenacity Ventures, and Venture Catalysts, the firms said in a joint statement on Tuesday. The launch follows the Indian government’s approval of a ₹1 trillion (approximately $11 billion) Research, Development, and Innovation (RDI) scheme, announced in the national budget earlier this year to boost deep tech R&D.

    Under the alliance, each member will commit private capital over a 5- to 10-year period to Indian-domiciled deep tech startups, the firms said. For now, there are relatively few such companies, as many of India’s best-known deep tech ventures with Indian founders are incorporated in the U.S. But New Delhi has made local incorporation a requirement for incentives under its new RDI scheme, which the alliance members aim to leverage.

    In addition to funding, the members will offer mentorship and network access. The firms also plan to utilize the alliance to help their portfolio companies expand into the Indian market.

    “This is in line with the strategic interests of both India and the U.S. at the governmental level, focusing on critical and emerging technologies,” said Celesta Capital managing partner Arun Kumar, who will be the inaugural chair of the alliance, in an interview.

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    Still, the geopolitical backdrop is complicated. In February, President Donald Trump and Prime Minister Narendra Modi launched the TRUST (Transforming the Relationship Utilizing Strategic Technology) initiative to deepen U.S.–India tech ties. But relations soon showed strain, as Trump imposed a 50% tariff on Indian goods last month over New Delhi’s continued purchases of Russian oil, a move analysts say has put the two leaders on opposite sides of a widening trade and geopolitical rift.

    Despite those tensions, the alliance — notwithstanding the geopolitical rift between the two leaders — is betting on India as a hub for startups developing foundational technologies such as AI, semiconductors, space, quantum, robotics, biotech, energy, and climate tech.

    “We find India as a particularly interesting market, not just for the opportunities that exist for new companies that get started in India, but also for companies in the U.S. that are seeking to expand into the Indian market,” Sriram Vishwanathan, founding managing partner at Celesta Capital, told TechCrunch.

    Celesta Capital — an early backer of Indian startups such as space-tech venture Agnikul, drone maker IdeaForge, and AI-driven cancer diagnostics firm OneCell Diagnostics — spearheaded the effort after discussions with industry stakeholders and the Indian government.

    “We have put this thing together to actually energize the ecosystem and bring like-minded investors together,” Vishwanathan said.

    The alliance will focus on early-stage startups — from seed to Series B — while steering clear of late-stage investments, Vishwanathan noted. He also stated that the billion-dollar-plus commitment is just the beginning, as “any long journey starts with the first step.”

    “You could expect more firms to join this alliance, both financial VC firms and private equity firms,” he said. “You should also expect corporates to join who have pretty significant investment programs.”

    While the alliance does not set its own eligibility criteria for new members, Vishwanathan said participants must meet the Indian government’s conditions under the RDI scheme — including investing in “sunrise” sectors, backing India-domiciled startups, and securing local regulatory approvals.

    “The alliance is just a platform for engaging with the government,” he told TechCrunch.

    As a group, the investors in the alliance plan to engage with the Indian government on policy and incentives to advance private industry’s interests and act as a unified voice, Vishwanathan said.

    In the past, regulatory changes rolled out without industry input have led to turmoil in India. Some such moves have drawn intense criticism from U.S. investors and were subsequently withdrawn following widespread outrage.

    The alliance’s members will share information voluntarily and coordinate on pipeline development, due diligence and co-investment opportunities, the firms said.

    An advisory committee, comprising representatives from Accel, Premji Invest, and Venture Catalysts, among the early participants, will help establish shared objectives and ensure coordination while preserving the independence of each fund.

    Kumar stated that while he is the inaugural chair, the alliance’s leadership will rotate as it moves forward.

    The alliance could prove a double-edged sword for Indian deep tech startups. While pooling long-term capital and giving a unified voice to the government appears to be a boon, there is risk if coordination falters, leaving promising companies caught in the gaps.

    “Over the next decade, startups will build in India and export breakthrough solutions to the world. The tailwinds are in place: ambition, talent, policy intent, and patient capital,” said Accel partner Anand Daniel in a prepared statement.

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    Jagmeet Singh

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  • Deal Dive: It’s time for VCs to break up with fast fashion

    Deal Dive: It’s time for VCs to break up with fast fashion

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    Fast fashion is an industry ensnared in labor issues and copyright problems, and it has an immense environmental impact due to its wastewater and carbon emissions. It also happens to have the potential to make a lot of money, fast.

    But despite all these issues, VCs won’t stop loving the sector.

    On Wednesday, my colleague Manish Singh wrote a scoop about a potential Accel investment into Newme, a fast-fashion startup based in India. Newme is an app-based retailer that produces 500 new items a week with an average price tag of $10. This news comes just a week after the company closed a seed round.

    Accel and Newme did not respond to requests for comment.

    Newme looks very much like many other VC-backed fast-fashion startups like Shein, which has raised $4 billion, and Cider, an Andreessen Horowitz–backed startup valued at $1 billion. Cider says it’s on-demand inventory makes it a more ethical fast-fashion option. That’s up for debate, though.

    Accel’s potential investment into Newme stood out to me for a few reasons, the largest of which is that I’m just not really sure why VCs back these companies.

    Fast-fashion companies gained rapid popularity and large followings because of their ability to bring clothes from the runway to your local department store in record time. But the fact is that often, they can only churn out clothes so quickly by cutting corners. The only way to make this strategy work is by using cheap materials and cheap — and likely underpaid — labor, and in many cases, by copying designs.

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    Rebecca Szkutak

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