Lightspeed is ramping up its AI-focused India strategy, betting that the technology will drive the next wave of startups in one of the world’s biggest markets, targeting $250 million in a new early-stage fund.
The Silicon Valley venture firm is already a major investor in AI companies such as Anthropic, xAI, and Databricks. In India, we are backing Sarvam AI, one of the country’s leading large-scale language model developers and a startup selected by the Indian government to help develop sovereign AI models.
The new fund, Lightspeed India Partners V, will be half the size of its $500 million predecessor fund, which was raised in 2022, and has already received commitments of 80% of its $250 million target, according to a letter sent to investors by TechCrunch on Thursday.
In late April, Lightspeed unveiled the new fund in a U.S. regulatory filing, but the filing did not specify a target size. Indian media previously reported that the company was looking to raise between $300 million and $350 million for the vehicle.
Lightspeed plans to begin investing from the new fund within two months, and the investment period is designed to be approximately two-and-a-half years, according to the letter. Until then, we will continue to make final investments from existing funds.
A spokesperson for Lightspeed declined to comment.
Starting with the new fund, Lightspeed will move its Indian funds into the same funding cycle as its global funds for the first time, according to a letter to investors. The changes will bring the company’s regional business, which it established nearly 20 years ago, more closely aligned with the company’s other businesses.
The move follows similar changes by rival Accel, which in August raised its latest $550 million India fund, along with new U.S. and European funds and global growth vehicles, as part of a $3.5 billion concerted fundraising effort. This was the first time Accelerator had raised four funds at the same time.
The $250 million fund is sized to match Lightspeed’s current investment speed and short investment horizon, the letter said. Lightspeed offered investors that its small size would allow it to focus on individual deals rather than fund size, allowing it to raise its next round of funding faster.
The new fund also focuses more on AI for Lightspeed’s early-stage investment strategy in the region. The investment thesis outlined in the letter predicts that AI will create more value in India than the internet, and the fund is looking for AI companies in India and across Southeast Asia.
India has yet to produce any major frontier AI model developers on the world stage, and investment in AI is much lower than in the US or China. Nevertheless, investors increasingly see opportunities in India at the application layer, taking advantage of India’s large pool of software developers and decades-long history as a hub for software and technology services.
The $250 million new Indian fleet is just a portion of the capital available across Lightspeed’s global platform. The company, which manages more than $65 billion in assets worldwide, raised $9 billion across multiple new funds last December, making it the company’s largest capital raise in its history. This total includes $980 million in early-stage venture funding.
Lightspeed’s India and Southeast Asia dedicated funds are just part of the capital the firm has deployed in the region. Those funds committed about $900 million, and Lightspeed’s global funds invested an additional $1.6 billion to support companies in its regional portfolio, according to a letter to investors.
The decision to dedicate its latest regional fund entirely to AI signals that Lightspeed is focusing on more distinct themes in a market where it has traditionally invested in a variety of sectors. The company’s portfolio in India spans businesses such as quick commerce, consumer internet, software and home services.
Lightspeed’s investments in India include companies such as quick commerce startup Zepto, audio platform Pocket FM, home assistance startup Snabbit, rooftop solar startup SolarSquare, and a suite of enterprise software businesses.
The new fund will be managed by the same team that led Lightspeed’s previous four funds in India, the letter said.
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