Accel opens an Indian outpost, with an eye toward $60M raise

Venture capital is streaming to India. The latest fund to add its chips to the pile is Accel Partners, a successful Palo Alto firm that already has outposts in the United Kingdom and China.

Accel, rather than beginning from scratch, is taking over a local firm called Erasmic Venture Fund. Four of Erasmic’s existing partners will stay on to run Accel India, with a focus on seed and early stage investments.

That focus is a bit of an oddity in the Indian market, where other firms have been injecting funding into businesses that have already proven successful. Like China, India is a rapidly growing market with enormous capital needs — which gives foreign investors a path to easy returns. But there’s also plenty of opportunity for new businesses, especially in the areas Accel India will be looking, which include mobile technology, consumer Internet and infrastructure.

The early-stage focus also means that the fund won’t need as much capital committed. Accel says it will start with about $60 million, which it expects to raise within the next three months. Erasmic also brings about 12 portfolio companies to the table, including Bollywood movie review site Chakpak, vacation planner Holiday IQ, the CafePress-like site Myntra, and green computing startup Virident.

Accel’s last round, which it raised at home, was for $520 million, completed in November.