Lightspeed has raised $500 million for its newest India and Southeast Asia fund, its largest for the regions, as it looks to make deeper investments in the South Asian market that is increasingly attracting global investors.
The fund, fourth for Lightspeed India, was hard-capped at $500 million, meaning the firm didn’t want to raise additional capital, said the firm, which unveiled its $275 million third India fund in 2020.
Lightspeed had initiated fundraising deliberations for the new India and Southeast Asia fund and was aiming to raise about $500 million.
Lightspeed additionally said Tuesday that it has raised more than $7 billion across several funds.
Lightspeed backs companies like Indian Energy Exchange, OYO, Byju’s, Grab, Acko, Razorpay, Udaan, Sharechat and Innovaccer.
In addition, the company also promoted partner Bejul Somaia to the global leadership team. Somaia, who founded Lightspeed Ventures India in 2008, will now be part of the VC firm’s strategy and global operations, apart from handling his existing role as an advisor on investments in India, Southeast Asia and Europe.
Lightspeed Ventures has so far invested close to $1.2-1.5 Bn in India via various funding vehicles, including global growth vehicles.
This is the fourth India fund of the firm. The last India-focused Fund III was raised in 2020 with a commitment of $275 Mn, while Fund II raised $180 Mn in 2018. As part of Fund I, the company had earmarked $135 Mn for Indian startups back in 2015.
The firm expects to invest in areas such as cross-border commerce, mobility, artificial intelligence- based automation and devops, climate and Web3 in addition to sectors such as consumer tech, Business-to-Business (B2B) commerce and enterprise, Shuvi Srivastava, partner, Lightspeed said.
“We predominantly lead seed and Series A rounds from the venture fund and so our ticket sizes have ranged from a few hundred thousand to high single digit million dollars.
We also selectively lead Series B investments from the early fund, and draw capital from our global growth funds for later stage growth rounds,” added Shrivastava, partner, Lightspeed.
Lightspeed has joined a growing number of VC firms who have raised funds to invest in Indian startups. In June, Sequoia Capital India raised its largest ever $2.85 Bn fund to invest in startups across India and Southeast Asia. Matrix Partners India, which counts Ola and VerSe among its portfolio, also said that it was looking to raise a $450 Mn fund to invest in local startups.
In April, Elevation Capital closed a $670 Mn fund focused on startups from India. Prior to that in March, Accel set aside a $650 Mn fund to invest in Indian startups.
Even as VC firms strengthen their India-focused funds, the country has been witnessing a downturn in funding deals. The second quarter of 2022 (CY22) saw funding plummet by a massive 42% to $6.8 Bn from $11.8 Bn in the first quarter of the year.
The deal count also tanked 22% to 393 in the quarter ending June 2022 from 507 in the March quarter. The slump has largely been attributed to rising inflation and fears of a looming recession.