What Bessemer plans to do with its $350 million India-only fund

Bessemer Venture Partners has closed $350 million in capital for its second dedicated India fund to back founders in the region, who build enduring companies.

The new fund will enhance the firm’s focus on early-stage investments across artificial intelligence (AI)-enabled services, software as a service (SaaS), fintech, digital health, direct-to-consumer brands, and cybersecurity.

Bessemer has a proven track record of backing companies at the early stage and supporting them through their growth.

Over the past five years, more than 80 per cent of its investments in India have been in early-stage ventures.

"We will invest entirely in Indian companies while continuing to invest from our global pool as well. India is on track to become a $1-trillion digital economy by 2030, and the SaaS market is expected to surpass $50 billion in the same timeframe.

"We believe this presents a massive opportunity,” said Bessemer Partner’s Anant Vidur Puri.

“We are also really excited about AI. As AI adoption accelerates, we see immense opportunities for innovation, and this fund allows us to back entrepreneurs shaping the next phase of India’s digital economy,” said Puri.

Puri said the AI opportunity in India can be categorised into three layers.

This includes the foundational model layer, where large-scale AI models are being built.

He said the government is doing strong work through initiatives like the India AI mission, procurement of graphics processing units (GPUs), and centralised data sets.

These will boost AI innovation in the country.The other opportunity is the application layer, where these foundational models are leveraged to create AI-driven business applications that solve specific industry problems.

This is where Bessemer is seeing companies across different sectors adopting AI to drive efficiency and scale.

There is also an opportunity related to the infrastructure layer, which supports the scaling of AI applications.

This includes AI computing, storage, and data infrastructure that allows AI models to be used efficiently in real-world business settings.

“We believe India has a significant opportunity to build AI-led businesses across these layers.

"AI is not just an incremental change but a fundamentally disruptive technology, and India is uniquely positioned to be a leader in this space,” said Puri.

He said India is at the forefront of the AI-driven transformation, with founders building domestic as well as globally-competitive businesses across enterprise software, fintech, and consumer technology.

Long-term partnership

In 2021, Bessemer raised a $220 million India-focused fund, its first dedicated fund for India, to back early-stage companies from seed to growth stage.

Speaking on the fresh fundraise, Vishal Gupta, partner and managing director (MD) of the Bessemer’s Bengaluru office said it deepens the company’s commitment to Indians startups.

“We remain focused on identifying and investing in founders who are driving innovation, solving complex challenges, and building market-defining companies,” said Gupta.

He added, “Beyond providing capital, we bring deep sector expertise, a global network, and hands-on support to help founders navigate their growth journeys and scale sustainably.”

Bessemer first established its India presence nearly two decades ago in 2006 and has since invested in more than 80 startups in the country.

The firm has a history of taking a roadmap-driven investment approach that enables investors to build conviction in emerging areas across industries.

This approach has led Bessemer to invest early during shifts in the market like the onset of the mobile revolution, India’s digital infrastructure, and its healthcare revolution, resulting in investments such as Urban Company, Perfios, and Medi Assist.

The firm’s first dedicated India fund backed notable startups including Boldfit, MoveInSync, Pepper Content, Shopdeck, Vetic, and Zopper.

Its broader portfolio includes category leaders like BigBasket, Livspace, Perfios, Swiggy, and Urban Company. The firm has also seen nine initial public offerings (IPOs) within its India portfolio.

With more than 145 IPOs and 300 portfolio companies in the enterprise, consumer and healthcare spaces, Bessemer supports founders and chief executive officers (CEOs) from their early days.

Bessemer’s global portfolio includes ServiceTitan, Pinterest, Shopify, Twilio, Yelp, LinkedIn, PagerDuty, DocuSign, Wix, Fiverr, and Toast.