Mumbai: Venture capital (VC) firm Elevation Capital is launching its ninth fund, worth $500 million, to invest in early-stage companies, with a particular focus on artificial intelligence (AI)-led opportunities, senior company officials said.
AI opportunities are only beginning to be unlocked, said Mukul Arora and Mridul Arora, partners at Elevation Capital, in an interview with Mint, disagreeing with the view that India is being left behind in the global AI race.
“We believe AI is unlocking expertise on top of the connectivity and payments infrastructure India has already built,” said Mukul, adding that expertise remains severely undersupplied.
Elevation believes India will have a billion internet users, hundreds of listed technology companies, and a new-age ecosystem that will create over a trillion dollars in value. “That gives us confidence that India is now entering a phase where it will play to its strengths,” he added.
Raising bets
Elevation Capital, whose portfolio includes companies such as Paytm, Swiggy, Urban Company, Spinny, Ixigo and MakeMyTrip, joins a growing list of VC firms that have raised, or are in the process of raising, fresh capital over the past year.
Accel has closed its eighth India-focused fund at $650 million, while Peak XV Partners has raised $1.3 billion across its India Seed, India Venture and APAC funds. Z47, formerly Matrix Partners India, is in discussions to raise its maiden $300-400 million fund, and Avataar Venture Partners is gearing up to launch its third fund with a target corpus of about $400 million.
In 2025, Elevation Capital raised $400 million for its pre-IPO fund, Elevation Holdings. So far, it has invested in companies such as Spinny and Urban Company through this new fund. With the ninth fund, the company will have nearly $900 million to deploy in early- and late-stage opportunities.
Mridul Arora said the firm believes in keeping the fund size and the investor base it targets limited. “We have remained quite concentrated, even on the limited partner side, choosing to build a few deep relationships. We have also been very disciplined about fund size. Our ability to work closely with founders the way we want naturally limits how many founders we can partner with each year,” he said, adding that to support founders with the right check size, $500 million is the right fund size.
Since 2020, Elevation Capital has raised nearly $1.33 billion across three vehicles—a $400 million Fund VII, a $525 million Fund VIII, and a $400 million Elevation Holdings fund. The firm launched its first India-focused fund in 2010, raising $350 million.
Today, Paytm, Mintifi and Acko are among some of its new-age financial services bets. A large part of the new fund, too, is likely to flow into financial services, the partners said.
“Financial services remain a very important area of focus for us. For us, AI represents another access layer,” Mukul Arora said.
"When it comes to AI in financial services, we believe Indian founders are particularly well-positioned. Navigating regulation, understanding Indian consumers and solving operationally complex problems are strengths that naturally belong to Indian entrepreneurs," he added.
Within financial services, Elevation is betting big on credit, insurance, wealth management and payments.
The firm is also mirroring a broader trend in the VC ecosystem, with investors increasingly chasing opportunities in deep tech, manufacturing and space technology. Beyond pursuing deals in these sectors, it is hiring more people to strengthen its deep-tech investment thesis, Mridul Arora said.
“We’re actively investing in building our own capabilities in deep tech. The quality of talent in India is exceptional; there is a strong push to build and manufacture for the world. And, there is much greater openness from the government today to procure products from younger companies, especially in defence, provided they have the best product.”
The firm will also scout for investment opportunities in education and healthcare.
Booking returns
As it prepares to raise a new fund, the firm has also been harvesting returns from some of its older bets. Over the past two years, it has partially exited investments in Paytm, Ixigo and Meesho.
“For us, returning capital to investors remains a very active discussion within the partnership. If you look at our listed portfolio companies, you’ll see that discipline reflected in both the data and our track record,” Mridul Arora said.
He said a number of its portfolio companies are working very hard towards initial public offerings (IPO). “There are at least four or five that we believe are fairly imminent.”
“Of course, capital markets go through cycles, and timing always matters… We simply have to work with that reality. But companies like Spinny, Acko, Souled Store and Mintifi have all reached meaningful scale. They’re enduring companies, and we believe that over the coming quarters or years, they should become public.”