The Situation

Peak XV Partners is undergoing its most significant structural correction since the 2023 Sequoia split, marked by a simultaneous capital contraction and leadership purge. The firm has confirmed the exit of three Managing Directors Ashish Agrawal, Ishaan Mittal, and Tejeshwi Sharma who are departing to launch an independent fund. This follows the earlier resignations of senior partners Harshjit Sethi, Shailesh Lakhani, and Abheek Anand, establishing a clear pattern of senior talent flight. Concurrently, the firm has slashed its growth fund corpus by $465 million (16% reduction) and recalibrated its carry structure from a premium 30% to a standard 20%, signaling a forced retreat from 2021-era valuations. Despite the turmoil, the firm is aggressively pivoting to AI infrastructure, evidenced by leading an $8 million seed round in semiconductor startup Agrani Labs.

Why It Matters

This is not standard turnover; it is a fundamental change in the firm’s DNA.

  • The “Growth” Trap: The reduction of the $2.85 billion fund and the exit of growth-focused partners like Mittal (Mamaearth, Razorpay) indicates Peak XV is conceding that the “growth at all costs” era is dead in India. The firm is effectively downsizing its ambition to match a market where liquidity is scarce and IPOs are the only real exit.
  • Strategy Rift: The departures stem from a “strategy clash” likely the friction between legacy generalist investors and the new mandate to become “AI-native”. The firm is trading institutional memory for agility, betting that AI infrastructure (like Agrani’s GPUs) will outperform traditional consumer tech in the next decade.
  • LP Confidence Test: While Peak XV sits on massive unrealized gains from upcoming IPOs like Groww ($1.5B stake) and Meesho, the loss of key dealmakers puts future fund vintages at risk. LPs invest in partners, not just brands; losing six MDs in 12 months is a red flag for stability.

Founder Action

  • Audit Your Cap Table: If Peak XV is on your cap table, identify your new lead partner immediately. The “orphan portfolio” risk is high right now; ensure you have a direct line to Shailendra Singh or the remaining GPs.
  • Leverage the AI Pivot: If you are building in AI infrastructure or semiconductors, Peak XV is desperate to deploy capital to prove its new thesis. Pitch them now while they need wins to distract from the exodus.
  • Price for Discipline: The fee reduction and fund cut prove that even top-tier VCs are price-sensitive. Do not expect 2021 multiples. Frame your ask around capital efficiency and clear IPO pathways, not just GMV growth.