Lightspeed targets $250M for brand spanking new India fund, specializing in early-stage AI

Lightspeed is sharpening its India technique round AI, focusing on $250 million for a brand new early-stage fund because the enterprise agency bets the expertise will drive the following wave of startups in one of many globe’s largest exchanges.

The Silicon Valley enterprise agency is already a serious investor in AI corporations together with Anthropic, xAI, and Databricks. In India, it has backed Sarvam AI, one of many nation’s main massive language mannequin builders and a startup chosen by the Indian authorities to assist develop sovereign AI fashions.

The new fund, Lightspeed India Partners V, might be half the dimensions of its $500 million predecessor, raised in 2022, and has already secured commitments for 80% of its $250 million goal, in line with a letter despatched to traders on Thursday and seen by TechCrunch.

In late April, Lightspeed disclosed the brand new fund in a U.S. regulatory submitting, although the submitting didn’t specify its goal measurement. Indian media had beforehand reported that the agency was trying to increase between $300 million and $350 million for the car.

Lightspeed plans to start investing from the brand new fund inside two months and has designed it round an financial backing interval of roughly two and a half years, per the letter. Until then, it’s going to proceed making its closing investments from the present fund.

A Lightspeed spokesperson declined to remark.

Starting with the brand new fund, Lightspeed can also be transferring its India funds onto the identical fundraising cycle as its world funds for the primary time, per the investor letter. The change brings a regional enterprise it established practically 20 years in the past extra intently consistent with the remainder of the agency.

The transfer follows an identical shift by rival agency Accel, which in August raised its latest $550 million India fund alongside new U.S. and Europe funds and a worldwide development car as a part of a coordinated $3.5 billion fundraising effort. It was the primary time Accel had raised all 4 funds concurrently.

The $250 million fund is sized to match how shortly Lightspeed is presently investing and its shorter financial backing interval, in line with the letter. Lightspeed advised to traders that the smaller measurement lets it give attention to particular person offers fairly than fund measurement, and lift its subsequent fund sooner.

The new fund additionally marks a sharper give attention to AI for Lightspeed’s early-stage financial backing technique within the area. The financial backing thesis outlined within the letter anticipates AI creating extra worth in India than the web did, with the fund in search of out AI corporations throughout India and Southeast Asia.

India has but to provide a serious frontier AI mannequin developer on the worldwide stage and has attracted far less investment in AI than the U.S. and China. Investors, nonetheless, more and more see a chance for India within the utility layer, drawing on the nation’s massive pool of software program builders and its decades-long historical past as a hub for software program and expertise companies.

The new $250 million India car is a fraction of the capital obtainable throughout Lightspeed’s world platform. The agency, which manages greater than $65 billion in property globally, raised $9 billion throughout a number of new funds final December, the most important fundraising haul in its historical past. The whole included a $980 million early-stage enterprise fund.

Lightspeed’s devoted India and Southeast Asia funds signify solely a part of the capital the agency has put to work within the area. Those funds have deployed roughly $900 million, whereas Lightspeed’s world funds have invested one other $1.6 billion to assist corporations from the regional portfolio, in line with the investor letter.

The determination to dedicate its latest regional fund fully to AI additionally marks a sharper thematic focus for Lightspeed in a market the place it has traditionally invested throughout sectors. Its India portfolio spans companies together with fast commerce, client web, software program, and family companies.

Lightspeed’s bets in India have included corporations corresponding to quick-commerce startup Zepto, audio platform Pocket FM, house-help startup Snabbit, rooftop photo voltaic startup SolarSquare, and a variety of enterprise software program companies.

The similar group that led Lightspeed’s earlier 4 India funds will handle the brand new fund, per the letter.