Lightspeed India Partners publicized on Tuesday that it has raised LPs’ $275 million for its third fund as the biggest American venture firm looks to scale up its bets on the world’s second-largest internet market.
In an interview with TechCrunch, the new fund, its biggest for India, will allow Lightspeed India Partners to make early-stage bets on more than two dozen startups in the region, said Hemant Mohapatra, a partner at the firm.
The news comes as the group, which started investing in India in 2007, made two high-profile partial exits in the past year (from budget-lodging startup Oyo and edtech firm Byju’s) that together delivered more than $900 million in cash returns.
Many of the other big investments include funding business-to-business marketplace Udaan, which was estimated at over $2.75 billion last year; local social media site ShareChat, which is in early stages of negotiations to raise money at a valuation of over $1 billion; and SaaS startups DarwinBox, Yellow Messenger and OkCredit.
The firm, which has six partners in the country, closed its first Indian dedicated fund ($135 million) in 2015. It closed its second fund for the region in 2018, which was sized at $175 million. Yet so far the investment firm has spent more than $750 million.
The Indian arm, which typically invests in the early stages of a startup, is continuing to work with its global mothership to write bigger checks to support some later-phase portfolio startups. (More than 80 percent of its investments were committed to seed companies in India or Series A stages.)
Last year, Indian entrepreneurs raised over $14.5 billion-a milestone for the financial economy. As in any other market, coronavirus has decelerated the funding spree in India.
Mohapatra said the virus has disrupted a fraction of the company’s portfolio startups, but noted that most startups are marching unfazed forward, and some have accelerated in recent months.
“Lightspeed thinks this is when the future’s best entrepreneurs and companies emerge. Powerful entrepreneurs leverage India’s digital economy development tailwinds to create a new future, and Lightspeed is fully committed to helping these entrepreneurs, “the firm said in a statement.
Lightspeed, which closed a $4 billion fund internationally earlier this year, is one of a group of American investment companies actively looking for Indian investments. Sequoia, its global rival, revealed two $1.35-billion venture funds for India and Southeast Asia last month. Eleven of its early-stage bets in this region have grown into unicorns in the last 14 years.