Lightspeed plans to raise $250 million for an AI fund in India — TechCrunch

Venture firm Lightspeed plans to raise $250 million for a new early-stage investment fund, Lightspeed India Partners V, focused entirely on artificial intelligence companies in India and Southeast Asia. TechCrunch reports, citing a letter from the company to investors.

The new fund will be half the size of Lightspeed's previous $500 million India fund, raised in 2022. According to the letter, about 80% of the previous fund's capital has already been allocated to startups. At the end of April, Lightspeed disclosed the new fund in a filing with the U.S. regulator, but did not specify the target size at the time.

Shorter investment period

Lightspeed expects to begin investing from the new fund within two months. The investment period is planned to be limited to about two and a half years, while before that the company will complete its final deals using funds from the current fund.

In its letter to investors, the company explained the smaller fund size by the pace of current investments and the shorter investment period. According to Lightspeed, this approach will make it possible to focus on individual deals rather than the size of the fund and to raise the next fund earlier.

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Strategy and fundraising cycle

With the launch of Lightspeed India Partners V, the company's India funds will for the first time operate on the same fundraising cycle as its global funds. The new fund's investment thesis assumes that artificial intelligence can create more value in India than the internet did in its time.

Lightspeed has already invested in Indian large language model developer Sarvam AI, while its global portfolio includes Anthropic, xAI and Databricks. At the same time, India's AI market has attracted significantly less investment than the United States and China. Investors see opportunities primarily in applied solutions, given the large number of software developers and India's long-standing role as a technology services hub.

Lightspeed has more than $65 billion in assets under management. In December, the company raised $9 billion for several new funds, including $980 million for an early-stage venture investment fund. The new India fund will be managed by the team that led Lightspeed's four previous India funds.