How Peak XV's Shailendra Singh is building the firm for the next decade

Marking two decades of its existence in India, Peak XV (formerly Sequoia Capital India) plans to continue backing category-defining companies and corner large stakes by doubling down. In an interview with Mint, Shailendra Singh, managing director and one of the founding members of the firm, talks about sunrise sectors the firm is betting big on and what keeps him awake.

Edited excerpts:

Peak has seen phenomenal success in the past half a decade. How do you see this journey having panned out for the firm?

We will celebrate twenty years in India next year. The early years were not easy. India was still a small market with a very young tech ecosystem. At the same time, it was a privilege to be so early, because it allowed us to partner with companies that went on to become foundational. Many of them were doing well on the ground, but it was still difficult as an investor. Liquidity was limited, capital markets were underdeveloped, and the scale of venture-backed outcomes people talk about today was not yet visible.

What has changed in the ecosystem to ensure the large-scale outcomes that we are seeing today?

As of December 2015, we had only two private portfolio companies that had crossed one hundred million dollars in annual revenue. Over the past decade, that number has expanded to several dozen, with many now consistently crossing $100 million. For us, that is a very important marker. Around that scale, you start to see operating leverage. Revenue grows, profitability begins to improve, and paths to meaningful exits, whether through IPOs or private equity, open up. We see that as the first signal that an ecosystem has entered a more mature phase.

Several of the subcategories we have backed over the last decade have scaled much more than anyone anticipated. This is the great India story. Things often take longer than expected, but if you remain patient, the eventual outcomes can be surprisingly large.

And do you see this getting replicated over and over again?

In most large companies, the first decade is foundational, and the second decade is where a disproportionate amount of market cap gets created. The real question is whether a company can become an enduring institution and whether the second and third decades can be as strong as or stronger than the first.

On the investing side, it never feels like a smooth compounding curve because venture is inherently cyclical. You have periods of euphoria followed by periods of volatility. In that context, India has actually been less cyclical in both private and public markets.

And only disruptive startups can achieve this scale?

We believe a startup needs a disruptive mindset at the beginning and a disciplined mindset once it scales into a real business. Once a company has thousands of employees, it needs a dual mindset of discipline and disruption to build something enduring. This is also one of the biggest mistakes startups make—many remain in the blitzscaling, growth-at-all-costs phase and fail to make the transition.

We have seen VCs steering companies towards profitability in the last few years after the funding winter hit the shores.

Founders are deeply independent people. They have a very specific view of the world they want to create. They seek counsel, but as investors, we have to respect and protect that independence. That is one of the key differences between private equity and venture capital. Private equity is oriented towards ownership and control, and firms often work very closely with the CEO inside the business. In venture capital, our role is to support a founder in a measured way and help them scale to greater heights. Founders typically remain in the driver’s seat.

Some of the sectors, quick commerce in particular, are seeing a race to finish where a lot of capital is being raised and burned to stay ahead of the competition. I know you don’t have an investment in the segment currently, but what is your view on this?

No enduring company can be built on the idea of perpetually raising capital without ever reaching profitability. Running a loss-making business is only a transient strategy. The abundance of global risk capital has sometimes created the mindset that companies can burn cash for 7–10 years, but that was never the intent. Once a business reaches triple-digit-million-dollar revenues, in most categories it should be able to break even or generate modest cash flow. That discipline is what ultimately allows a company to endure.

On quick commerce, the key question is what the industry structure will look like five to ten years from now. Is this a market that can support multiple profitable players, or will it consolidate around one or two? Price wars are always transient and rarely healthy for an industry. Right now, behaviour is being influenced by the availability of risk capital. When the dust settles, it is likely that one company will hold a very large share of the market, with perhaps one or two smaller but meaningful competitors.

Has Peak XV’s thesis evolved over the years? How different will the next decade be in terms of the sectors you are looking at?

We prefer to back businesses with strong moats, consistent compounding, clear economic models, and a long-term orientation. Our focus areas include fintech, AI, software, and consumer. Deeptech has become an important new pillar, where we are investing in precision manufacturing, space, and semiconductors. We generally avoid structurally low-margin sectors, categories dominated by price wars, and areas like logistics, unless we see something truly distinctive.

And AI?

We are very focused on AI. There are parts of the ecosystem that are scaling aggressively with high burn, but many companies at the application layer or in adjacent infrastructure are growing fast without consuming a lot of capital. AI has accelerated technology adoption by dramatically shrinking time to value. Implementation, configuration, and change management can now happen much more quickly and efficiently. That is often one of the biggest cost items in a software company’s profit and loss statement. Reducing that cost has enabled much faster and more profitable growth. One thing markets may be underestimating is how quickly this AI wave will democratise globally. It may start with a concentration of activity in the United States, but it will spread very rapidly.

How is the cross-border business panning out?

Before making any investments in the United States, we hired three senior operators who could help our companies grow revenue and attract talent in that market. We see a powerful wave of global innovation emerging from India, Singapore, and the broader Asia-Pacific region. Many of these companies are now ready to build in the US and need support there. Our US cross-border initiative, which we have built out over the last year and which has been accelerated by the AI cycle, remains a priority. At the same time, our core focus on India and the Asia-Pacific across sectors is unchanged.

What keeps an investor like you awake at night?

What keeps me awake at night are the forces we cannot control. The last five years have been shaped by significant geopolitical shifts. The pandemic, trade tensions, and other disruptions pushed the world in unexpected directions. Those changes affected our founders and put real pressure on many companies. With a large and diverse portfolio, any global shock will affect some part of it. Our constant question is how we can remain institutionally strong and show up for founders in a consistent way through those periods.

Are you expanding your team?

We are expanding our scope but not necessarily increasing our headcount. We believe good firms should have lean teams. We try to follow the same advice we give our founders. So, while we are broadening our investing horizons, we are very conscious about keeping the team focused, tight, and high conviction.