Lightspeed Eyes $500M India-SEA Fund Amid IPO Pipeline Boom
Overview
Lightspeed India Partners is preparing to launch its fifth India and Southeast Asia-focused fund in late 2026, potentially in the $500 million range. This comes as several portfolio companies, including Oyo, Zepto, and Udaan, are gearing up for initial public offerings, promising future liquidity for the venture capital firm. The VC giant also aims to increase investments in AI, deeptech, and quick commerce sectors.
Lightspeed India Partners is preparing its fifth dedicated India and Southeast Asia fund, targeting a $500 million raise starting in the latter half of 2026. This move comes as a number of its prominent portfolio companies are advancing towards initial public offerings.
IPO Pipeline Fuels Exit Strategy
Several key Lightspeed India portfolio companies, including online grocery delivery firm Zepto, e-commerce marketplace Udaan, and automotive tech platform Acko, are reportedly in advanced stages of IPO preparations. Ride-sharing giant Oyo and B2B manufacturing platform Zetwerk are also cited as nearing public debuts, presenting a significant potential liquidity event for the venture capital firm.
Fund Strategy and Scale
The upcoming fund is expected to mirror the $500 million size of its fourth fund, raised in 2022. Lightspeed India has systematically increased its fund sizes, previously closing $135 million for Fund I, $180 million for Fund II, and $275 million for Fund III in 2020. Fundraising for the new vehicle is anticipated to commence in the third or fourth quarter of 2026.
Global Scale and Sector Focus
This initiative follows a major global fundraising drive by Lightspeed Venture Partners, which announced in December 2025 the closure of over $9 billion across six new funds, pushing its total assets under management past $40 billion. While Lightspeed maintains a sector-agnostic approach within India, it signals an increased focus on artificial intelligence (AI)-native companies, deep technology, and quick commerce. The firm has a substantial track record, having backed over 165 AI companies and invested more than $5.5 billion in the sector.
Market Context
The planned fundraising occurs after a deliberate pause, reflecting a slower deployment cycle post the 2021 startup funding surge. Lightspeed's global lead, Bejul Somaia, had previously indicated a potential flexibility in fund size, even considering a smaller $250-300 million vehicle. The move also aligns with a broader revival in India-focused venture capital, with several other major firms like Nexus Venture Partners, A91 Partners, and Accel India successfully raising substantial new funds recently.
