Capital Landscape: From Exits to New Structured Bets 

India’s venture capital landscape is entering another phase of churn and consolidation, marked by rising exits, fresh fund launches, and a growing push from policymakers to deepen domestic pools of long-term capital. Two developments over the past week capture this transition clearly: a fresh round of liquidity activity at Lightspeed India and the launch of a new reported USD 350-400 million venture fund by three former senior leaders from Peak XV Partners.

Three former Peak XV investment executives, Ashish Agrawal, Ishaan Mittal, and Tejeshwi Sharma, have launched a new venture capital firm called Mettle Capital. The fund is targeting a corpus of USD 350-400 million and plans to invest in Series A and Series B startups, while also making selective seed-stage bets. 

“1B+ people using AI every day at work, at home, in education, health, finance, entertainment, and commerce. AI becomes ubiquitous in a country of 1.4B people. Today, businesses touching Indian consumers/businesses are worth ~USD 5 trillion in Indian public markets. AI is becoming a massive accelerant for company building in India. Products are getting built faster, distribution is becoming global from day one, capital ecosystems are deepening, and founders are more ambitious than ever before. The pace of value creation in India is accelerating. Direction of travel is right,” said Tejeshwi Sharma in an X post recently, which could indicate the new firm’s investment interests. 

The launch comes only weeks after the trio exited Peak XV, formerly known as Sequoia Capital India & Southeast Asia. The new firm is reportedly being structured as an equal partnership model, a notable departure from the increasingly layered structures seen at large global investment platforms.

The timing is significant as Peak XV itself recently closed USD 1.3 billion across India and APAC-focused funds, its first major independent raise since separating from Sequoia Capital in 2023. The firm said a large portion of the capital would be directed toward artificial intelligence, fintech, consumer technology, and deeptech opportunities across the region. 

“The size, scale, and sophistication of technology startups are deeply inspiring across both India and APAC. India’s FinTech ecosystem is already one of the most advanced in the world, and the Consumer opportunity has decades of compounding ahead. The combination of technical innovation, deepening markets, quality of talent, and increasing global ambition makes this an amazing time to be investing in the region,” said Peak XV while announcing the fund closing. 

At the same time, established firms are under growing pressure to generate distributions and liquidity for limited partners after the slowdown that followed the 2021 funding boom. That backdrop has made exits more strategically important than ever.

Lightspeed India has been among the firms sharpening its focus on monetisation and portfolio liquidity. The firm has been actively recalibrating its India strategy while simultaneously preparing a new India-focused fund, reportedly sized between USD 300-350 million, smaller than some of its earlier pools. The new strategy is expected to place greater emphasis on early-stage AI and deeptech startups.

While reports around a recent, unnamed exit continue circulating, the broader theme revolves around firms that are increasingly prioritising secondary sales, structured exits, and public market liquidity over simply holding assets indefinitely.

Anuj Bhargava, managing director at Lightspeed India, recently noted that there are now “fewer windows to sell” for both companies and investors, underscoring the growing importance of carefully timed exits. 

The broader ecosystem, meanwhile, is receiving active policy attention from New Delhi. During a recent interaction between the Finance Ministry and the Indian Venture and Alternate Capital Association (IVCA), industry leaders discussed how India can expand long-duration domestic capital pools and strengthen regulatory frameworks for alternative investing.

Srini Srinivasan, Chairperson, IVCA & Managing Director, Kotak Alternate Asset Managers Ltd., said that the discussions focused on strengthening long-term pools of capital for infrastructure, manufacturing, and private credit-led financing solutions, while also exploring how India can continue building globally competitive and forward-looking regulatory frameworks for the sector.

“As India scales its infrastructure and energy-transition ambitions, the need for patient, long-duration capital will become increasingly important,” said Srinivasan. 

Meanwhile, Gopal Jain, Vice-Chairperson, IVCA – Managing Partner, Gaja Capital, said that the discussions focused on the industry’s shared aspiration of helping scale India’s alternatives capital ecosystem towards the INR 100 lakh crore milestone by 2036. 

“In that context, we discussed innovative measures to encourage both long-term foreign capital inflows as well as greater domestic institutional capital participation to support India’s growth story built on entrepreneurship, innovation, and infrastructure,” said Jain. 

The post-2021 environment has forced firms to rethink deployment pace, ownership structures, and return timelines. Large firms are becoming more selective. Emerging managers are spinning out to build focused strategies. And policymakers are increasingly treating alternative capital not merely as startup funding, but as a strategic pillar of India’s long-term economic growth architecture.