Lightspeed plans $250M early-stage AI fund for India with 80% commitments secured

Lightspeed Venture Partners plans to raise $250 million for a new India-focused early-stage fund dedicated to AI startups, according to a letter to investors cited by TechCrunch. The firm has already secured commitments for 80% of the target, with plans to begin investing within two months.

The new fund, Lightspeed India Partners V, will be half the size of its predecessor, a $500 million India fund raised in 2022, and will operate on a shorter investment period of roughly two and a half years. Lightspeed’s India and Southeast Asia funds have deployed approximately $900 million to date, with an additional $1.6 billion invested globally from Lightspeed’s broader platform into regional portfolio companies.

For the first time, Lightspeed is aligning its India fundraising cycle with its global funds, a change that brings its regional business more closely in line with the rest of the firm. The move follows a similar shift by rival Accel, which raised a $550 million India fund alongside its U.S. and Europe funds in August as part of a $3.5 billion fundraising effort.

Lightspeed’s decision to dedicate the new fund entirely to AI marks a sharper thematic focus for the firm in India, where it has historically invested across sectors such as quick commerce, consumer internet, software, and household services. The firm’s India portfolio includes companies like quick-commerce startup Zepto, audio platform Pocket FM, and enterprise software businesses.

The fund’s investment thesis anticipates that AI will create more value in India than the internet did, with a focus on the application layer given the country’s large pool of software developers and its history as a hub for technology services. India has yet to produce a major frontier AI model developer on the global stage and has attracted less AI investment compared to the U.S. and China.