Shocking Revelation: Venture Firm Abandons Urban Elites, Targets Poor Villages Instead
In a bold move that has sent shockwaves through the startup community, Accel, one of India’s most influential venture capital firms, has announced its intention to ignore the country’s wealthy urbanites and instead focus on the poor and underserved villages.
"Bharat" – A Code Word for Poverty
The firm, known for its early investments in unicorn companies like Flipkart and Swiggy, claims that the rural areas of India, dubbed "Bharat," hold untold riches and opportunities for entrepreneurs. According to Accel partner Anand Daniel, the top 20% to 30% of rural spenders shell out over $250 billion per month – more than half the population of urban cities.
A Contrarian View
Accel’s decision flies in the face of conventional wisdom, which has long held that rural areas are too poor and disconnected to be viable markets for startups. But Daniel and his team believe that the proliferation of smartphones and affordable internet has created a fertile ground for digital services to thrive.
The Rise of Rural Consumerism
Rural Indians are upgrading their lifestyles, opting for premium products like used iPhones and double-door refrigerators. Accel sees this trend as a sign that there is a massive untapped market waiting to be tapped.
A New Business Model
To succeed in rural India, startups will need to adopt a fundamentally different business model. They will need to work closely with micro-entrepreneurs, who often maintain long-standing relationships with lenders and logistics providers. Accel portfolio company Citymall is a prime example of this approach, which prioritizes collaboration and empowerment over traditional top-down business models.
A Bold Bet
By betting on rural India, Accel is taking a contrarian view that could pay off in a big way. The firm believes that the next generation of Indian unicorns will emerge from these underserved areas, with valuations to match their urban counterparts.
The Urban Elites Will Have to Wait
In a move that is sure to ruffle the feathers of the urban startup elite, Accel has signaled that it will no longer prioritize investments in India’s wealthy cities. This decision sends a clear message: the future of Indian entrepreneurship lies in the rural heartlands, not the urban metropolises.
