Peak XV Partners seeks AI Edge to adopt the LP route through strategic investment in U.S. funds
The move is an early trend in the AI (AI) that is, the quotation above, for venture capital firms to deepen their networks and identify the U.S. as a market leader.
To be sure, Peak XV (pronounced Peak 15) has also made direct investments in AI-related companies in the U.S. market over the past two years since its separation from Sequoia Capital. Recent U.S. investments include Supabase (US-Singra), Atomic Energy (US), Hightouch (US), Luminai (US), Nirmata ((United States), Rappcanvas (USA), etc.
However, the above quote says that the construction fund relationship will put XV peak ahead of the curve in terms of new AI trends and potentially make a new introduction with the founders of the upcoming company that may be able to invest.
The person added that Peak XV is also a limited partner (LP) launched by former executive Piyush Gupta fund in November and is expected to be an investor in more funds launched by other former company executives.
Additionally, the company is meeting early to raise up to $1.4 billion in West Asia (Southeast Asia) fund, the first since its split with its parents. The fund could be raised at the end of the fiscal year, people familiar with the matter said.
Why invest in funds
Making fund investment is a way to try and test new venture capital and private equity firms (PE) companies into new markets. When global investors first started investing in India, they made several LP investments in Indian fund managers before starting direct investment to understand the market first.
Peak’s partners have been investing since 2006, and when they become part of Sequoia Capital, they can enter the U.S. market. However, this visit ended in June 2023, when Sequoia was divided into three globally. India and Southeast Asia teams became XV peak partners.
“Investing money helps build ecosystems and better track more opportunities in these markets,” said Kashyap Chanchani, founder and executive partner of the Indian investment bank Rainmaker Group. “Companies have access to proprietary transactions and expand their network and track trends, in addition to simply getting returns.”
According to Chanchani, investment companies with these funds can also enter the Indian market and service base.
Related to the United States
Peak XV has been building its U.S. presence over the past two years to make up for access when the company became part of Sequoia Capital. One of the key reasons is to help portfolio companies that are already based on the U.S. or have links to the U.S. market.
Peak XV has over 400 companies in its portfolio of financial services, software and AI, as well as consumer internet and seed, venture capital and growth at all stages. Nearly 150 companies have links to the U.S. market, both in the market and by Indians founded in the U.S.
Shortly after the split in 2023, XV Peak hired Jaime Bott, a former talent director at Sequoia Capital, to help its portfolio companies in the U.S. hire talent.
In April 2024, it hired Dini Mehta and Chris Meritt as operating partners in the United States. Earlier this month, it hired Arnav Sahu as a partner, and the company’s first investment team member in the United States. Sahu was formerly a Y-combinator. PeakXV said earlier this month that he also founded a fintech app and worked at Spark Capital and Blackstone.
Peak XV loss
Since the split of Sequoia capital, Peak XV has at least six senior executives from India and the sea team left. Partner Shailesh Lakhani and managing directors Abheek Anand and Anandamoy Roychowdhary have left the company in recent months.
In November last year, Peak XV managing director Piyush Gupta left the company to launch its own secondary fund, Kenro Capital. Other executives such as Shweta Raj Kohli and Gayatri Yadav also left the company. Last month, PeakXV executive Shreyansh Thakur also exported.
In addition to employee turnover, PeakXV announced in October that it is cutting management fees for its growth funds to remain competitive in the market. It also features an overheated market, returning 16% of its capital from funds raised for India and sea.
VC professional portfolio companies have sold their shares, either going public to the public market or selling shares in already listed companies such as Ixigo, Awfis, Go Go Digital General Insurance, Blackbuck, Zomato, Zomato, Mamaearth, Mamaearth, Truecaller, Truecaller, Indigo Paints, Fift of 5 Star Business Finance and Mobikwik, among others.
The company also brought money home by selling part or full bets in its unlisted portfolios, such as Rebel Foods, Healthkart, Finova, K12 Techno and Cloudnine Hospitals.
In total, the company has received over $1.2 billion in exports over the past 12-15 months.
