SUMMARY
The Peak XV Anchor Fund is structured as a permanent capital vehicle or evergreen perpetual fund and will invest from the internal balance sheet
The Peak XV Anchor Fund will purely have capital contributions from the firm’s partners and team members
The VC firm intends to start making small investments initially with the fund, and will compound these investments over time
Venture capital firm Peak XV Partners is all set to launch a permanent capital vehicle called Peak XV Anchor Fund to enable the firm’s leadership to invest in future funds as well as partner with other fund managers.
According to sources privy to the development, the Peak XV Anchor Fund was announced to the firm’s limited partners at a recent two-day meet in Delhi. The fund is structured as a permanent capital vehicle or evergreen perpetual fund and will invest from the internal balance sheet.
Sources claimed the Peak XV’s partners and fund managers have been contributing to its main funds over the years as limited partners, but this is the first time that the firm has decided to institutionalise the internal funding. ”This fund will create a culture of high accountability and alignment with LPs. It will institutionalise and deepen the alignment with LPs,” we were told.
Crucially, it will not impact Peak XV’s existing relationships with limited partners that have invested in its various funds. The primary objective of the anchor fund is to allow Peak XV managers to be significant investors in the firm’s future funds.
Interestingly, Peak XV’s former parent company Sequoia Capital also launched a permanent capital fund launched two years ago, but this raised money from Sequoia’s LPs. Unlike that, the Peak XV Anchor Fund will purely have capital contributions from the firm’s partners and team members. “This makes it a unique and pathbreaking investment vehicle for the venture capital industry,” according to one source.
The VC firm intends to start making small investments initially with the fund, and will compound these investments over time.
In June 2023, Sequoia India & Southeast Asia separated from Sequoia Capital US to form Peak XV Partners. Sequoia’s US, India and China operations have since then been run as independent entities. Peak XV Partners’ managing director Shailendra Singh told Inc42 at the time that the new structure will open up unbounded global opportunities for Indian founders and Sequoia’s LPs.
“Companies are emerging from every region with global ambitions. Strategies for each region and business unit have diverged. Scale, market leadership causing brand confusion, portfolio conflict,” Singh said.
Peak XV inherited the $9 Bn+ assets under management from Sequoia India & Southeast Asia as well as a portfolio of 400+ companies stretching across 13 separate funds. After the separation, Sequoia’s incubator and accelerator programs such as Surge, Spark, Build, Guild and Pathfinders are also operated by Peak XV and its management team.
Post the demerger, the VC firm also ramped up its investments in the country’s mushrooming startup ecosystem. It counts unicorns like CRED, Meesho, Groww, Info Edge, Mamaearth, Ixigo, Unacademy, among other prominent startups in its portfolio.
Most recently, it led a $12 Mn fresh funding round of D2C luggage startup Mokobara.
