Lightspeed Venture Partners, a prominent Silicon Valley-based investment firm, holds the view that artificial intelligence (AI), despite the current "euphoria" surrounding its valuation, signifies a transformative shift across industries. Co-founder and partner Ravi Mahtre, along with partner Bejul Somaia, recently shared their insights on the AI landscape, India's opportunities, and Lightspeed's investment strategies in an interview.
AI Valuations and Transformative Potential
While acknowledging the valuation hype in the AI sector, Lightspeed maintains a long-term perspective, viewing AI as a "once-in-a-generation transformation" that will reshape businesses across all sectors. They believe that AI's impact will be profound and enduring, warranting a strategic investment approach.
India as a Key Market for AI
Lightspeed sees India as a massive and critical market for AI investments, highlighting its strengths in both usage and talent. Mahtre emphasized India's position as one of the largest global markets for digital platforms and its high concentration of AI talent, driven by a robust IT ecosystem and the Indo-US tech corridor. This talent density is a key reason why major AI labs are establishing a presence in India.
Somaia further elaborated on India's opportunities within the AI stack, dividing it into three layers: foundation models, enablement and tooling, and applications. He suggested that India's strengths lie primarily in the second and third layers, where AI can be applied to existing workflows to drive efficiency and create value. Lightspeed has already invested in companies in healthcare revenue cycle management, AI-enabled accounting, and automation verticals that export services to the US, showcasing the potential of layering AI on top of existing labor-based processes.
Lightspeed's Investment Strategy in India
Lightspeed India has been actively investing in AI-native companies, deploying a significant portion of its latest local fund (Fund IV) in this area. In 2023, Lightspeed led a $41 million Series A funding round for Sarvam.ai, alongside Peak XV Partners and Khosla Ventures. The firm's focus extends beyond AI to include investments in electric vehicles (EV) and climate tech, reflecting a commitment to supporting innovation across diverse sectors.
Lightspeed's investment approach is characterized by a measured and consistent strategy, adapting to market shifts while remaining focused on long-term opportunities. While Somaia remained tight-lipped about specific fundraising plans, he acknowledged the broader market's evolution and affirmed that Lightspeed's approach would align with the opportunities ahead. Lightspeed has a team of 55 employees in India, including 27 partners.
The Rise of Sovereign AI
Mahtre also addressed the trend of "sovereign AI," where countries are seeking to develop their own AI capabilities. He cited Lightspeed's investment in Mistral, a European foundation-model company, as an example of this trend.
Lightspeed's Broader Portfolio and Investment Philosophy
Lightspeed Venture Partners is a global firm with eleven offices and approximately $35 billion in assets under management as of 2023. The firm focuses on seed, early-stage, and growth-stage investments in enterprise, fintech, consumer, and healthcare sectors. Lightspeed's portfolio includes companies like OYO Rooms, and magicpin.
Lightspeed's investment philosophy emphasizes the collective power of diverse skills and perspectives. The firm believes in shared success and fostering a partnership approach that benefits both the firm and the founders it supports.
