Lightspeed targets $250M for new early-stage India AI fund

Lightspeed is sharpening its India strategy around artificial intelligence, targeting $250 million for a new early-stage fund as the venture-capital firm bets the technology will drive the next wave of startups in one of the world’s largest markets. The Silicon Valley firm is already a major investor in AI companies including Anthropic, xAI, and Databricks, and in India has backed Sarvam AI, one of the country’s leading large language model developers and a startup selected by the Indian government to help develop sovereign AI models.

The new vehicle, Lightspeed India Partners V, will be half the size of its $500 million predecessor, raised in 2022, and has already secured commitments for 80% of its $250 million target, according to a letter sent to investors on Thursday and seen by TechCrunch. Lightspeed disclosed the new fund in a U.S. regulatory filing in late April, though the filing did not specify a target size; Indian media had previously reported the firm was seeking between $300 million and $350 million.

Lightspeed plans to begin investing from the new fund within two months and has designed it around an investment period of roughly two and a half years, per the letter, continuing final investments from the existing fund until then. Starting with this fund, Lightspeed is also moving its India funds onto the same fundraising cycle as its global funds for the first time, bringing a regional business it established nearly two decades ago closer in line with the rest of the firm.

The $250 million size is calibrated to Lightspeed’s current pace of investing and its shorter investment period, the letter said, letting the firm focus on individual deals rather than fund size and raise its next fund sooner. The fund also marks a sharper AI focus for Lightspeed’s early-stage strategy in the region: its investment thesis, outlined in the letter, anticipates AI creating more value in India than the internet did, with the fund seeking AI companies across India and Southeast Asia. India has yet to produce a major frontier AI model developer and has drawn far less AI investment than the U.S. and China, though investors increasingly see opportunity in the application layer, given the country’s large developer pool and long history as a software and technology-services hub.

The new fund is a fraction of the more than $65 billion Lightspeed manages globally; the firm raised $9 billion across several funds last December, its largest fundraising haul ever, including a $980 million early-stage fund. Lightspeed’s India and Southeast Asia funds have deployed roughly $900 million, while its global funds have invested another $1.6 billion supporting companies from the regional portfolio. The same team that led Lightspeed’s previous four India funds will manage the new one.

Why it matters

A dedicated, all-AI India fund signals venture investors increasingly see the country’s application layer — not just its developer talent — as a distinct AI opportunity, one Lightspeed is betting will outpace the value the internet created there.