Peak XV also lowered management fees to 2 per cent on three of its growth and four multi-stage funds, according to Bloomberg news. The firm also lowered carried interest, or share of profits, to 20 per cent for these funds
Peak XV Capital, formerly known as Sequoia India and Southeast Asia, has announced a 16 per cent reduction in its 2022 vintage fund as part of a strategic shift. The $2.85 billion fund will be cut by $465 million, reflecting the firm’s adjustment to market conditions while maintaining a strong focus on long-term investments in the region.
“We are defined by the choices we make. We have made voluntary changes that we believe will serve us well in a multi-decade time horizon,” Peak XV stated in a press release.
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The firm emphasised its long-term commitment to India and Southeast Asia, citing strong portfolio performance and an optimistic outlook for the region. The decision comes as public market valuations in India remain elevated.
Despite trimming its vintage fund, Peak XV remains focused on early-stage investments. The venture capital firm reiterated its commitment to seed and venture-stage opportunities, particularly in a market where public equities are richly priced.
While adjustments have been made to its growth and multi-stage funds, particularly in terms of carried interest tied to profit distributions, the economics of its seed and venture funds will remain unchanged, according to the press release.
Indian startups raised $7.5 billion in venture capital (VC) funding across 780 deals between January and August 2024, a 53 per cent surge in funding value and a 5.1 per cent increase in deal volume, compared to the same period last year, according to data from GlobalData.
Globally, the country ranks among the top five markets for VC activity in both deal volume and value. Between January and August 2024, India accounted for 7.3 per cent of global VC deals and 4.6 per cent of the total funding value.
“While this may be contrarian to market exuberance, this will serve our founders and LPs well in the long term,” Peak XV said, suggesting the move is aligned with a strategy to prioritise long-term stability over short-term market trends.
Peak XV also lowered management fees to 2 per cent on three of its growth and four multi-stage funds, according to Bloomberg news. The firm also lowered carried interest, or share of profits, to 20 per cent for these funds.
First Published: Oct 02 2024 | 2:48 PM IST