Synopsis
Venture capital firm Accel has raised $5 billion in new funds, with $4 billion dedicated to its fifth Leaders fund for late-stage AI startups. An additional $650 million will go to a sidecar fund for increased exposure to major investments.Listen to this article in summarized format
The firm will dedicate $4 billion to its fifth Leaders fund, focused on writing large checks to late-stage startups around the world, Accel plans to announce Wednesday.
The firm also raised $650 million for a so-called sidecar fund, which gives limited partners extra exposure to Accel’s biggest investments by allowing it to selectively increase the size of certain bets, especially for investments in its existing portfolio, Accel partner Matt Weigand said.
The California-based firm, founded in 1983, made its name investing early in tech darlings. Accel famously led Facebook’s Series A in 2005, and launched a dedicated growth-stage effort three years later to back companies like Spotify Technology SA and Atlassian Corp. The new funds will boost the firm’s assets under management from $31 billion as of last year.
Most of Accel’s recent investments have, unsurprisingly, focused on AI. Large funding rounds for AI startups have become more common in Silicon Valley, with huge financing hauls for companies like Anthropic and OpenAI boosting venture investments for US companies in the first quarter of the year to a record-breaking $250 billion, according to Crunchbase data.
Weigand said Accel aims to make 20 to 25 investments out of its new $4 billion growth fund, with an average check size of about $200 million, roughly on par with its past investments. At the same time, Weigand said he expects the largest investments Accel makes to get even bigger, and for the firm to temporarily accelerate its investing pace to meet the AI moment.
“The opportunity and the scale of growth that we’re seeing in these companies is just fantastic,” he said. “You don’t want to miss that.”
Accel has invested in some of the most talked-about startups in the AI industry. The firm first backed Cursor last June when it was valued at $9.9 billion. Earlier this year, the AI coding startup was in talks to raise new capital at a valuation of about $50 billion. Accel also invested in Anthropic last year at an $183 billion valuation, less than half of the $380 billion valuation the frontier lab now commands.
Because building AI technology can be extremely expensive, and the AI boom has made investors more willing to pour big money into younger companies, Accel may use its growth fund to back unusually large early-stage investments too. For example, its bet on Mind Robotics’ $500 million Series A round in March came from the new late-stage fund, Weigand said.
Going forward, Weigand said the firm will emphasize bets on AI-powered startups at the intersection of software and hardware, including industries like robotics, defense tech and hardware for AI data centers.
