Accel Partners, the venture capital firm that has backed the likes of Facebook and Flipkart, is launching a $305 million India-focused fund to capitalize on the country’s favorable conditions for start-ups.

The investment is almost double the size of Accel’s last such fund — launched in 2011 — and will target technology businesses in the consumer, enterprise software, mobile and healthcare sectors, the Silicon Valley-based firm said on Tuesday.

A rising number of smartphone users, cheaper Internet and a vast middle class have turned India into one of the hottest markets for investors such as Accel, Singaporean wealth fund Temasek Holdings [TEM.UL] and Japan’s SoftBank Corp, fuelling growth of technology start-ups including Flipkart, Snapdeal and Ola.

Investors pumped $4.5 billion into the Indian Internet space in the 13 months to February, Morgan Stanley said in a report, while sources have told Reuters of heightened competition among investors as they scout for India’s next billion-dollar business.

Industry analysts value Flipkart at about $11 billion and Ola at around $1 billion. Snapdeal says it is worth slightly more than $5 billion.

“While there is more competition (investors) and more start-ups, some of the better companies have begun to accelerate a lot faster and get a lot bigger. So, yes, we do expect to help build many large companies,” Accel’s Subrata Mitra told Reuters.

via Accel launches $305 million Indian start-up fund | NewsDaily.