State of venture investments in India, according to Lightspeed

Lightspeed partners explore optimizing VC funds in India, the spectrum of startup investing, and the country’s prospects in the global AI race.

Over 150 investors, including Singapore’s sovereign fund Temasek and Malaysia’s Khazanah, convened at Mumbai’s prestigious Trident Oberoi hotel on a recent Friday for venture firm Lightspeed India Partners’ “Lift Off” summit.

The two-day event aims to foster collaborations by facilitating “a multitude of perspectives, ideas, and investments to be exchanged within a condensed timeframe, fostering connections across every conceivable permutation and combination,” as described by Karthik Reddy, co-founder of Blume Ventures.

Building upon the success of last year’s inaugural Lift Off, which catalyzed deals and networking, including facilitating Singapore sovereign fund GIC’s investment in business-to-business marketplace VeGrow later in the year.

The optimistic atmosphere this year mirrored India’s resurgence in startup funding over the past three to four months. However, despite the opulent setting, the industry still grapples with pressing questions.

Byju’s, once India’s most valuable startup with a $22 billion valuation, is now seeking new capital through a rights issue that would significantly reduce its valuation by 99%. Paytm, once hailed as the poster child of India’s startup aspirations following its $20 billion valuation IPO in 2021, has seen its market cap dwindle to below $3 billion amidst market volatility and regulatory challenges.

Many late-stage startups cling to their peak 2021 valuations, while numerous highly valued seed deals from 2021 struggle without subsequent funding. Simultaneously, Indian VCs currently hold a record $20 billion in dry powder, prompting skepticism among investors regarding over-fundraising.