Lightspeed is further shifting its India operations toward AI. According to a letter to investors cited by TechCrunch, the venture capital firm is raising $250 million for a new early-stage India fund, betting that AI will drive the next wave of entrepreneurship in the region.
The new fund size has decreased to $250 million.
The new fund, named Lightspeed India Partners V, is about half the size of the previous India fund raised in 2022, which secured $500 million and has so far committed approximately 80% of its capital.
Reports show that Lightspeed disclosed the new fund to U.S. regulators at the end of April this year, but the filing did not specify the target size. Indian media previously reported that the firm had sought to raise between $300 million and $350 million.
According to the letter to investors, Lightspeed plans to begin deploying the new fund within the next two months, with an overall investment period of approximately two and a half years. Until then, the team will continue to complete the remaining investments from the previous fund.
Indian funds shift to align with global fundraising rhythms
With this new fund, Lightspeed will, for the first time, align its India fund with its global fundraising cycle. For an institution that established its regional presence in the country nearly two decades ago, this means the India platform will be more closely integrated into its global capital structure.
Lightspeed stated in the letter that a smaller fund size better aligns with the current pace of investments and suits shorter investment cycles. The institution believes this structure helps focus on individual deals rather than merely pursuing fund size, while also enabling the next fundraising round to begin earlier.
Investment focus shifts to early-stage AI projects
This new fund will focus more explicitly on AI, seeking relevant startups in India and Southeast Asia. In the letter, Lightspeed stated that it believes AI could create more value in India than the internet era did.
Lightspeed has previously invested in Anthropic, xAI, and Databricks. In India, its portfolio includes Sarvam AI, one of the country’s prominent large model developers, which has been selected by the Indian government to participate in the development of a sovereign AI model.
Although India has not yet produced globally leading frontier model developers and AI funding is significantly lower than in the United States and China, investors are increasingly focusing on application-layer opportunities. This trend is supported by India’s large community of software developers and its long-standing foundation in the software and technology services industry.
The regional fund size is smaller than the global platform.
This $250 million fund represents a small portion of Lightspeed’s global platform. The firm currently manages over $65 billion in assets and raised a record-breaking $9 billion in new capital last December, including a $980 million early-stage venture fund.
According to the letter to investors, Lightspeed’s dedicated fund for India and Southeast Asia has deployed approximately $900 million in total; additionally, its global fund has made follow-on investments of approximately $1.6 billion in portfolio companies in the region.
Lightspeed’s previous investments in India spanned instant retail, consumer internet, software, and home services, with portfolio companies including Zepto, Pocket FM, Snabbit, and SolarSquare. The report also stated that the new fund will continue to be managed by the same team that oversaw the previous four India funds.