Lightspeed is raising a new venture fund in India with a strong focus on artificial intelligence. The firm is targeting $250 million for the fund, which will back early-stage AI startups.
The new fund is called Lightspeed India Partners V. It has already secured commitments for 80% of its target, according to a letter sent to investors on Thursday and seen by TechCrunch.
A Lightspeed spokesperson declined to comment.
A Smaller Fund With a Narrower Focus
The new fund will be half the size of its $500 million predecessor, which Lightspeed raised in 2022. Indian media had earlier reported that the firm hoped to raise between $300 million and $350 million.
Lightspeed first disclosed the fund in a U.S. regulatory filing in late April. That filing did not include a target size.
According to the letter, the $250 million size matches how quickly Lightspeed is currently investing. The firm told investors the smaller fund lets it focus on individual deals and raise its next fund sooner.
The investment thesis in the letter expects AI to create more value in India than the internet did. The fund will look for AI companies across India and Southeast Asia.
This is a change for Lightspeed in the region. Its India portfolio has historically spanned many sectors, including quick commerce, consumer internet, software, and household services.
Past bets include quick-commerce startup Zepto, audio platform Pocket FM, house-help startup Snabbit, and rooftop solar startup SolarSquare.
Lining Up With Global Funds
Starting with this fund, Lightspeed will move its India funds onto the same fundraising cycle as its global funds for the first time. The firm set up its India business nearly two decades ago.
Rival firm Accel made a similar move in August. It raised a $550 million India fund alongside new U.S. and Europe funds and a global growth fund, as part of a $3.5 billion effort.
Lightspeed manages more than $65 billion in assets worldwide. Last December, it raised $9 billion across several funds, the largest haul in its history, including a $980 million early-stage fund.
Its India and Southeast Asia funds have deployed about $900 million. Lightspeed's global funds have invested another $1.6 billion in companies from the regional portfolio.
Globally, the firm has backed AI companies such as Anthropic, xAI, and Databricks. In India, it has invested in Sarvam AI, a large language model developer chosen by the Indian government to help build sovereign AI models.
India has not yet produced a major frontier AI model developer on the global stage. It has also drawn far less AI investment than the U.S. and China.
Investors see a chance for India in AI applications, based on its large pool of software developers and long history in tech services.
The same team that led Lightspeed's previous four India funds will manage the new one.
Lightspeed plans to start investing from the new fund within two months, per the letter. The fund will have an investment period of about two and a half years, and the firm will make its final investments from its existing fund until then.
