Accel launches $305 million Indian start-up fund

(Reuters) - Accel Partners, the venture capital firm that has backed the likes of Facebook and Flipkart, is launching a $305 million (204 million pounds) India-focused fund to capitalise on the country's favourable 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 Holdingsand 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. (Reporting by Nivedita Bhattacharjee in Mumbai; Editing by David Goodman)