Lightspeed Targets $250M India Fund With Sharper Focus on Early-Stage AI

Lightspeed is targeting $250 million for a new India-focused early-stage fund as the venture firm sharpens its regional investment strategy around artificial intelligence.

Lightspeed India Partners V has already secured commitments for about 80% of its target, according to an investor letter sent Thursday. The fund will be half the size of the $500 million vehicle Lightspeed raised for India and Southeast Asia in 2022.

The firm expects to begin investing from the new fund within two months and plans an investment period of roughly two and a half years. Until then, Lightspeed will continue making its final investments from the existing fund.

Lightspeed declined to comment.

New fund puts AI at the centre of Lightspeed’s India strategy

The new vehicle marks a sharper focus on AI for Lightspeed’s early-stage investing across India and Southeast Asia. The investment thesis outlined in the letter anticipates AI creating more value in India than the internet did and calls for backing companies developing AI products and applications across the region.

Lightspeed already has exposure to major AI companies globally, including Anthropic, xAI and Databricks. In India, its portfolio includes Sarvam AI, a large language model developer selected by the Indian government to help develop sovereign AI models.

India has attracted less AI investment than the U.S. and China and has yet to produce a major frontier model developer with comparable global prominence. Investors have increasingly focused instead on opportunities at the application layer, supported by India’s large software developer base and its long-standing technology services industry.

Lightspeed cuts fund size and shortens its investment cycle

Lightspeed disclosed Lightspeed India Partners V in a U.S. regulatory filing in late April, though the filing did not specify the size of the fund.

Earlier reports had suggested a larger vehicle. The Economic Times previously reported that Lightspeed was targeting between $300 million and $350 million.

According to the investor letter, the $250 million target more closely reflects Lightspeed’s current investment pace and the shorter deployment period. The firm told investors that a smaller fund would let it focus on individual deals rather than fund size and return to market sooner with its next vehicle.

Lightspeed is also aligning its India fundraising cycle with its global funds for the first time, bringing the regional operation it established nearly two decades ago more closely into the firm’s broader fundraising structure.

The change follows a similar move by Accel, which raised a $550 million India fund in August alongside new U.S. and Europe funds and a global growth vehicle as part of a coordinated $3.5 billion fundraising effort.

India fund is one part of Lightspeed’s global capital base

The new $250 million vehicle is small compared with Lightspeed’s wider platform. The firm manages more than $65 billion globally and closed more than $9 billion across new funds in December, including a $980 million early-stage venture fund.

Lightspeed’s dedicated India and Southeast Asia funds have deployed roughly $900 million. In comparison, the firm’s global funds have invested another $1.6 billion into companies from the regional portfolio, according to the investor letter.

The AI-focused strategy is narrower than Lightspeed’s historical approach in India, where it has invested across consumer internet, quick commerce, software, household services and other sectors. Its portfolio includes Zepto, Pocket FM, Snabbit, SolarSquare and multiple enterprise software companies.

The same team that managed Lightspeed’s previous four India funds will oversee the new vehicle.