Peak XV Partners, the largest India and Southeast Asia-focused VC fund, has unveiled its latest early-stage cohort, Surge 09, which highlights a strong emphasis on artificial intelligence (AI) and deeptech startups. With 10 out of the 13 selected startups specializing in AI and deeptech sectors, Peak XV aims to tap into the international frenzy surrounding these technologies.
Key Takeaway
Peak XV’s Surge 09 cohort demonstrates a focus on AI and deeptech startups, addressing the perceived dearth of depth in India’s AI startup landscape. With a portfolio of highly innovative startups, Surge has emerged as the most influential early-stage investor in India and Southeast Asia. The program’s collaboration with other investors and generous seed funding distinguish it from other offerings in the market. Peak XV’s expansion into the Australian market further solidifies its position as a prominent player in the venture capital ecosystem.
Dearth of Depth in India’s AI Startup Landscape
The Surge 09 cohort comes at a time when there is a growing global sentiment suggesting a lack of depth in India’s AI startup landscape. Y Combinator’s most recent batch, for example, included over 200 startups, more than half of which focused on AI. However, fewer than 10 of these startups were based in India, leading to speculation that the venture firm and India might be growing apart.
Shailendra Singh, Managing Director of Peak XV, acknowledged the need for more AI startups but also highlighted the interesting investments made by the fund in this space. Singh believes that India’s market is becoming increasingly fertile with greater expertise, which is evident in Surge’s latest cohort.
Surge 09: A Cohort of Innovation
The Surge 09 cohort consists of startups tackling various problems and industries. Some noteworthy startups include:
- Dozer: An open source data infrastructure platform that assists data scientists and engineers in building highly scalable, real-time data APIs.
- Ethereal Machines: Specializes in the advanced manufacturing sector, particularly the production of precision engineering components using multi-axis computer numerical control machines.
- Horizon Quantum Computing: Develops software tools to unlock the capabilities of quantum computing hardware.
- InCore: A fabless semiconductor startup building RISC-V-based processor solutions for various industries, including industrial automation and consumer electronics.
- Mercu: An employee engagement platform that facilitates the hiring, training, and engagement of frontline teams within companies.
- Neurowyzr: Develops advanced technologies to mitigate early signs of brain decline in the healthtech sector.
These startups, among others, demonstrate the presence of talented founders with international work experience and a strong focus on innovation, which Singh believes would have been unlikely to find five years ago.
The Influence of Surge and Peak XV
Surge, which completes five years in early 2024, has become the most influential early-stage investor in India and Southeast Asia. The program has backed over 140 firms, which collectively have raised more than $2 billion in follow-on funding. Surge’s unique value proposition lies in its collaboration with select other investors, allowing for close engagement with founders and providing guidance on various aspects of their startups.
Surge startups have the opportunity to raise up to $3 million in seed funding, making the program stand out from others in the market. Peak XV’s extensive set of resources further supports the startups, ensuring their potential for success. With two cohorts being rolled out annually, the Surge program continues to make a significant impact in the startup ecosystem.
Evaluating Opportunities in Australia
Peak XV’s latest fund, its first since its split from Sequoia U.S., includes two Australian startups and indicates the firm’s active evaluation of opportunities in the Australian market, particularly in the software sector. Singh sees a strong alignment between the skillsets of Peak XV and the ambitions of Australian software startups to build global businesses. This expansion into new markets not only enhances the firm’s calibration but also exposes them to high-quality companies.
