Venture capital firm Lightspeed is targeting $250 million for its new India fund, which will focus on early-stage startups, particularly artificial intelligence ventures in India and Southeast Asia. According to a letter the firm sent to investors and that TechCrunch reviewed, the fund has so far secured commitments covering 80% of its target size.
The fund is called Lightspeed India Partners V and will be half the size of the previous fund the firm raised in 2022, worth $500 million. Lightspeed disclosed the fund in a U.S. regulatory filing in April without specifying its size, while Indian media reports had previously indicated that the firm might target raising between $300 million and $350 million.
Faster Investing and a Smaller Fund
Lightspeed intends to begin investing from the new fund in approximately two months, with an investment period of about two and a half years. Until it begins deploying the new capital, the firm will continue making its final investments from the previous fund.
The investor letter says the fund’s size is consistent with Lightspeed’s current investment pace and the shorter investment period. The firm believes that raising a smaller amount will allow it to focus on the investment opportunities themselves rather than seeking to deploy more capital, and may also enable it to return to the market to raise its next fund sooner.
With the new fund, Lightspeed will align the fundraising cycle of its India funds with its global funds for the first time. This change brings the firm’s regional operation, which was established nearly two decades ago, closer to its global business structure.
Artificial Intelligence at the Core of the New Thesis
The fund’s full allocation to artificial intelligence represents a thematic shift in Lightspeed’s India strategy, which has historically invested across multiple sectors, including quick commerce, consumer internet services, software and home services.
The firm is betting that artificial intelligence could create more value in India than the internet did, while seeking companies working across the technology’s various applications in India and Southeast Asia. Lightspeed’s global artificial intelligence investments include companies such as Anthropic, xAI and Databricks, while its India portfolio includes Sarvam AI, the developer of large language models that the Indian government selected to help develop sovereign artificial intelligence models.
What Matters About This Move?
The new focus does not mean that India has become a direct competitor to the United States and China in developing leading artificial intelligence models; the article notes that the country has not yet produced a major developer of a frontier model with a global presence, and that its artificial intelligence investments are far lower than those in the U.S. and Chinese markets. However, investors see greater opportunity in the application layer, benefiting from India’s large base of software developers and its long experience in technology services.
The move also shows that competition to fund Indian artificial intelligence companies may center on application companies and early-stage ventures, rather than solely on building foundation models. However, the letter does not disclose the targeted number of investments, the average deal size or the criteria for selecting companies, leaving the fund’s practical impact dependent on the speed at which it deploys capital and its ability to turn this thesis into investments capable of growth.
Lightspeed’s Regional Scale
The new fund’s value represents a small portion of Lightspeed’s global platform, which manages more than $65 billion in assets and raised $9 billion across several funds last December, including a $980 million fund for early-stage investments.
According to the investor letter, Lightspeed’s funds dedicated to India and Southeast Asia have invested approximately $900 million, while the firm’s global funds added another $1.6 billion to support companies in the regional portfolio. The new fund will be managed by the same team that led the previous four India funds.