VC Insights | Issue# 12 [May 6, 2025]
What?
After separating from Sequoia Capital two years ago, Peak XV Partners is making a significant move in the Indian and Southeast Asian venture capital landscape. The firm is gearing up to launch its first independent investment vehicle since the split, targeting a substantial fundraise to back promising early-stage ventures across these high-growth regions. This was first reported by Inc42 and here is their coverage.
Ambitious Fundraise Targets
Peak XV is setting its sights on securing $1.2-1.4 Bn for its maiden independent fund. According to industry sources, the VC firm recently met with Limited Partners (LPs) to discuss this upcoming initiative, with plans to officially announce the fundraise soon. The firm anticipates launching the fund by the end of 2025 and finalizing the capital raise by early 2026. Beyond this core fund, Peak XV is simultaneously preparing to expand its investment capability through its growth vehicle, enabling it to participate in larger funding rounds for scaling companies.
Strategic Independence After Sequoia Split
The upcoming fund represents a crucial milestone in Peak XV’s journey as an independent entity. The split from global VC giant Sequoia Capital in June 2023 marked a significant shift in the Asian investment landscape. The separation stemmed from practical challenges like increasing complications from portfolio overlaps, where different regional branches of Sequoia were backing competing startups. See list below. Learn more.
- Druva (backed by Sequoia India) competed with Cohesity (backed by Sequoia US or Sequoia Capital) in data management.
- Sirion Labs (Sequoia India) and IronClad (Sequoia US) both operated in contract lifecycle management.
- Atlan Data (Sequoia India) and Stemma (Sequoia US) focused on similar data cataloging solutions.
- DailyHunt (Sequoia India) and ByteDance (Sequoia China) competed in content platforms.
- Clevertap (Sequoia India) and Kahuna (Sequoia US) operated in the marketing automation and customer engagement space.
- Wiz (Sequoia India) and Pingsafe (Sequoia US) offered cloud security solutions.
The aforementioned overlaps created market confusion, internal tensions over resource allocation, and challenges in maintaining confidentiality between competing portfolio companies. The separation allowed each entity to pursue region-specific strategies without these complications and also allowed streamlined, faster investment operations.
Post-split Performance
Since becoming independent, Peak XV has demonstrated remarkable momentum. The firm inherited over $9 Bn in assets from Sequoia India & Southeast Asia, managing this substantial portfolio across 13 distinct funds with approximately 400 companies.
The VC firm hit the ground running, signing more than 10 deals within just ten weeks of the separation. More impressively, Peak XV has secured exits worth nearly $1.2 Bn in the 15 months following the split, divesting stakes in several listed portfolio companies, including food delivery platform Zomato, D2C brand Mamaearth, and caller identification service Truecaller.
Deeptech: The “Final Frontier”
Peak XV’s fundraising efforts coincide with its sharpened focus on deeptech investments. The firm’s managing director, Rajan Anandan, recently described the deeptech sector as the “final frontier” for India’s startup ecosystem during the Startup Mahakumbh event.
This strategic emphasis reflects Anandan’s conviction that India stands at the threshold of a transformative deeptech revolution, powered by:
- A robust engineering talent pool.
- The country’s accelerating economic growth.
- Supportive government policies for technological innovation.
Peak XV has already demonstrated this commitment by backing early deeptech ventures, such as InCore Semiconductor, Mindgrove, and Horizon Quantum. Anandan has confirmed that the leading VC firm is actively investing in deeptech areas, such as semiconductor, spacetech, battery recycling, biosciences, and AI. The thesis is based on enabling frontier technologies that require deep IP, long development cycles, and technical defensibility – areas India is now ready to lead in. The firm is taking an unusually long-term approach, investing very early (even at pre-seed stages) despite the inherently extended development cycles and uncertain commercial timelines typical of deeptech startups.
This patient capital approach distinguishes Peak XV from many Indian investors who remain cautious about deeptech’s high risks and delayed returns. By backing foundational technologies in semiconductors, quantum computing, and AI hardware, Peak XV is making a bold bet on India’s potential to create globally significant technology companies over the next decade.
A Legacy of Strategic Investments
Since its entry into India in 2006 (originally as Sequoia India), the leading VC firm has established itself as a cornerstone investor in the country’s startup ecosystem. Its impressive portfolio includes many unicorns, such as Pine Labs, CRED, Groww, and Unacademy. The upcoming fund represents a strategic declaration of Peak XV’s vision for the future of technology innovation across India and Southeast Asia. By combining significant capital with a deeptech focus, the firm is positioning itself to catalyze the next generation of transformative startups in the region.
As India’s startup ecosystem continues maturing beyond consumer internet and fintech successes, Peak XV’s deeptech emphasis signals an important evolution in how venture capital is approaching emerging markets. This distinct approach will definitely help India transition from a technology adopter to a technology creator on the global stage.
Thoughts
Peak XV’s fundraising initiative comes at a pivotal moment for India’s VC landscape. The firm’s decision to raise a substantial independent fund represents more than just financial continuity – it is a strategic statement about the evolution of India’s technology and innovation ecosystem.
The focus on deeptech particularly manages to stand out as a strategic shift. While India has successfully produced numerous unicorns in consumer-facing sectors, such as e-commerce, fintech, and SaaS, the country has yet to make its mark in frontier technologies requiring deep intellectual property. Peak XV’s willingness to back pre-seed deeptech startups despite their long gestation periods suggests a fundamental shift in investment philosophy.
This approach stands in stark contrast to the prevailing trend among Indian VCs, who typically favor quicker returns from business model innovations rather than fundamental technological breakthroughs. By taking this contrarian position, Peak XV is effectively making a long-term bet on India’s capacity to produce globally competitive technology infrastructure – not just applications built on top of foreign technology stacks.
The timing is significant as well. As global tensions around tariffs and technology supply chains intensify, countries are increasingly prioritizing technological self-reliance. India’s strong engineering talent pool coupled with government initiatives like the India Semiconductor Mission, Indian Space Policy, IndiaAI Mission (and other support initiatives in semiconductor, spacetech, and AI) creates a unique opportunity for deeptech startups. Peak XV recognizes that the next decade may see India transition from primarily being a services and application layer to becoming a creator of core technologies. For example, India’s first foundational Large Language Model (LLM) is being built by Sarvam AI with support from the Indian government.
For founders building in frontier technology spaces, Peak XV’s fund sends an important signal that patient capital is available for ambitious, high-risk ventures with extended development timelines. This could catalyze a new wave of startups tackling fundamental challenges in semiconductors, quantum computing, advanced materials, AI, and other deeptech domains.
Whether this strategy will yield venture-scale returns remains to be seen. Deeptech investments typically require not just financial patience but specialized technical expertise to evaluate and support portfolio companies. Peak XV’s success will largely depend on its ability to build the right team and processes for this fundamentally different investment category.
What is certain is that Peak XV’s first independent fund marks a significant milestone not just for the firm but for India’s venture ecosystem as a whole. If successful, it could inspire more investors to allocate capital to technological moonshots rather than incremental innovations, potentially reshaping India’s position in the global technology landscape for decades to come.
If you are interested to learn more, feel free to check out this coverage by Inc42.
Thank you for reading through! I genuinely hope you found the content useful. Feel free to reach out to us at ankanatwork@gmail.com and share your feedback and thoughts to help us make it better for you next time.
Acronyms used in the blog that have not been defined earlier: (a) Venture Capital (VC), (b), Billion (Bn), (c) United States (US), (d) Direct-to-Consumer (D2C), (e) Artificial Intelligence (AI), (f) Intellectual Property (IP), and (g) Software as a Service (SaaS).