AI and other deep technologies are the prevailing themes in the new early-stage cohort from Peak XV Partners, as the largest India and Southeast Asia-focused VC fund intensifies its search for opportunities in a sector garnering international frenzy.
Ten out of 13 startups in the latest cohort of Surge, Peak XV’s powerfully influential early-stage program, specialize in AI and other deeptech sectors, the fund said on Monday. The unveiling of Surge’s ninth cohort — and the selection of its startups — comes at a time when a growing global sentiment suggest a dearth of depth in India’s AI startup landscape.
Y Combinator’s most recent batch includes over 200 startups, of which more than half concentrate on AI, for instance. Despite the cohort’s considerable size, fewer than 10 startups are India-based, sparking speculation that the venture firm and India could be growing apart.
“Would I like to see more AI startups? The answer is yes. But do we see zero? No. We see some pretty interesting things that we have picked and invested in,” said Shailendra Singh, Managing Director of Peak XV, in an interview with TC.
“I think with every passing quarter, every passing six months, and every passing year, India becomes a more and more fertile market with greater expertise,” said Singh, who also oversees all other stages of venture investments at the firm. “What has been consistent in the last 18 years that I have been investing, sometimes it can feel slow, sometimes there are market cycles, but if you take any two-three years vintage, it’s very clear that there’s a step-up.”
The new batch — which features startups working on a range of problems from helping identify and address early brain decline, to transforming the world of processor design and scaling the hydrogen economy — features multiple founders who have PhDs and international work experience, said Singh. “Could we have found this cohort five years ago? I think that’s quite unlikely even if had wanted,” he added.
“I think we will start to see more fundamental innovation in India, and more science being applied to solve problems.”
The Surge S9 cohort
- Dozer — founded by Matteo Pelati and Vivek Gudapuri — is an open source data infrastructure platform that aims to assist data scientists and engineers in building highly scalable, real-time data APIs in minutes.
- Elivaas — founded by Karan Miglani and Ritwik Khare — serves as a management platform for villas and luxury apartments, enabling owners to monetize, oversee, and maintain their vacation homes in India.
- Ethereal Machines — founded by Kaushik Mudda and Navin Jain — operates in the advanced manufacturing sector, specializing in the production of precision engineering components via its multi-axis computer numerical control machines.
- Horizon Quantum Computing — founded by Joe Fitzsimons — develops software development tools that are designed to unlock the capabilities of quantum computing hardware.
- InCore — launched by Arjun Menon, Gautam Doshi, GS Madhusudan, and Neel Gala — is a fabless semiconductor startup that is building RISC-V-based processor solutions for various industries, including industrial automation and consumer electronics.
- Mercu — set up by Elliott Gibb and Jascha Zittel — functions as an employee engagement platform, facilitating the hiring, training, and engagement of frontline teams within companies.
- Mindgrove — founded by Sharan Srinivas J and Shashwath T R — designs cost-efficient, scalable microprocessor technology, designing SOCs that combine all the electronic components onto a single chip.
- Neurowyzr — founded by Pang Sze Yunn and Navdeep Vij Singh — operates in the healthtech sector. It specializes in developing advanced technologies to mitigate early signs of brain decline.
- Newtrace — founded by Prasanta Sarkar and Rochan Sinha — is a climate tech startup that is attempting to manufacture innovative electrolyzers for the efficient and affordable production of green hydrogen.
- Pix.ai — developed by Alvin Li, Raven Gao, and Veronica Liao — is an AI-powered anime art generator, which provides users with a suite of tools and templates for creating personalized anime art.
- Relevance AI — founded by Daniel Vassilev and Jacky Koh — is a machine learning startup that is attempting to help companies automate workflows through a no-code AI workforce.
- ZeroK — founded by Mudit Krishna Mathur, Varun Ramamurthy, Samyukktha Thirumeni, and Shivam Nagar — is an AI platform that is assisting developers in faster troubleshooting of production incidents by performing intelligent checks that guide them to root causes, thus reducing downtime.
- There’s also a startup, which has chosen to remain in the stealth mode for now, that is operating an AI platform aimed at boosting software team productivity. It provides contextual answers tailored to their codebases.
Surge, which completes five years in early 2024, has emerged as the most influential early-stage investor in India and Southeast Asia. The program, which also invites select other investors in the ecosystem to evaluate and participate in the cohort’s startups, has backed over 140 startups to date that have collectively raised more than $2 billion in follow-on funding.
Surge, which rolls out two cohorts annually, maintains a measured portfolio size for each batch. This allows Peak XV Partners and other participating members to engage closely with founders, offering guidance on a range of subjects from product strategy to the startup’s mission statement. A Surge startup raises up to $3 million in seed funding, a feature that, along with access to an extensive and arguably unmatched set of resources, sets the Peak XV program apart from other market offerings.
The new cohort comes at a time when many other VC funds in India are also attempting — or re-attempting — to build a version of their own Surge program. Singh said a growing competition among venture firms is a good thing for the founders and the ecosystem.
The new fund, first since Peak XV’s split from Sequoia U.S., also features two Australian startups. It’s not the first time Surge or any of the other Peak XV arms has backed an Australian startup, but Singh confirmed that it’s a country that the venture firm is actively exploring, especially for software firms.
“Our skillset to help companies go to the U.S., launch cross-border — we have over a 100 investments in software companies, where we try to help them build global businesses — those same skillsets are very applicable to software startups in Australia. Almost all of the software startups in Australia also have the ambitions to build global firms. For that reason, they find us to be a good fit, and it improves our calibration and gives us exposure to a new market where we find high-quality companies in general,” he said.
