Fund focus: Lightspeed ramps up in India, Southeast Asia

Lightspeed Venture Partners’ latest round of global fundraising underlined a runaway trend of massive commitments to emerging Asia at a time of increasing nerviness about a pending global recession. The USD 7.1bn haul included the firm’s largest ever early-stage fund for the combined India and Southeast Asia region, with USD 500m in commitments.

It also coincides with a retraction in investor comfort around technology risk and start-ups with questionable models or financial metrics. Nevertheless, it comes only two months after Jungle Ventures raised USD 600m for a similar India-Southeast Asia strategy and one month after Sequoia Capital accumulated USD 2.8bn across a set of India and Southeast Asia funds.

“People are wondering how companies are going to get through this market. But I think LPs, like us, understand we’re in this business for 10 years, and we don’t expect this so-called winter to last for 10 years,” said Harsha Kumar, a partner at Lightspeed India Partners (pictured). “We expect this to be a speedbump.”

Lightspeed’s third vintage for this region closed on USD 275m in 2020; this compares to USD 175m for Fund II (2018) and USD 135m for Fund I (2015). Before that, the firm made investments from its global funds. The crucial evolution in approach across this timeline has been a gradual increase in crosspollination of ideas and resources between the firm’s global strategies.

The USD 7.1bn haul also includes USD 1.98bn for the 14th global flagship fund, USD 2.4bn for the second Opportunity Fund, and USD 2.3bn for the fifth Select Fund. The latter two target later-stage companies, including in India and Southeast Asia.

Interregional portfolio support is already underway with the new India-Southeast Asia fund. Harsha said one Southeast Asian investee was staffed with a senior product development professional from Lightspeed’s US network. This is effectively seen as the acquisition of knowledge about how the business model has already played out in a more mature market.

“The seed for this was planted about three years ago, and since then it has really evolved into a fully functional machine. So, we’re a lot more excited about this fund cycle,” Kumar said. “We feel like this is just going to be a different level of operation given how closely we work now.”

The strategy will be broadly similar to past vintages with a focus on financial technology, consumer, and software-as-a-service. One area that is likely to see more action is blockchain, with Lightspeed having recently unveiled a dedicated team and strategy for the sector.

There will also be more engagement in terms of operational support. In India-Southeast Asia alone, Lightspeed claims to have an approximately 30-strong operations team, with specialisations ranging from legal to marketing to recruitment. Cheque sizes will vary widely, but the firm is conscious not to spread the team too thin.

“We typically do 2-3 deals a year max,” said Pinn Lawjindakul, a partner at Lightspeed. “We think it’s just not fair for the founder to be one in 100 portfolio companies for us. For each partner to work with each portfolio company closely – that only comes when they don’t have too many investments.”

• Tweet  
• Facebook  
• LinkedIn  
• Google plus  
• Save this article  
• Send to  

• Topics
• South Asia
• Southeast Asia
• Fundraising
• GPs
• Venture
• Technology
• India
• Singapore
• Lightspeed Venture Partners