Why Are Peak XV Partners Leaving Now?
Three senior partners have exited Peak XV Partners, the influential venture capital firm backing startups across India and Southeast Asia, following an internal disagreement over the firm's aggressive pivot toward artificial intelligence investments. The departures—confirmed by Managing Director Shailendra Singh—involve Ashish Agrawal, Ishaan Mittal, and Tejeshwi Sharma, investors with a combined 30+ years of tenure who collectively shaped some of the region's most successful fintech and consumer tech exits. While specific dispute details remain private, the timing coincides with Peak XV's public commitment to double down on AI while expanding into U.S. markets, signaling a strategic inflection point for one of Asia's most prominent VC institutions.
Credit: Ishaan Mittal/X
The Breaking Point Behind the Departures
According to internal communications, the split originated from a philosophical disagreement between Managing Director Shailendra Singh and senior partner Ashish Agrawal regarding resource allocation and investment thesis evolution. Rather than airing grievances publicly, both sides characterized the separation as mutual and respectful—a deliberate choice to preserve relationships within India's tightly knit startup ecosystem. Singh emphasized the firm's desire to handle transitions "classily," noting that multi-stage venture firms often experience leadership realignments as market dynamics shift. Crucially, Peak XV confirmed all board seats held by departing partners would transfer immediately to existing general partners, with minimal disruption expected given overlapping governance across portfolio companies.
Who's Walking Away—and What They Built
Ashish Agrawal's 13-year tenure at Peak XV cemented his reputation as a architect of India's digital finance revolution. He spearheaded early investments in Groww, the discount brokerage that became one of India's most celebrated IPO success stories in 2025, alongside stakes in payment infrastructure players and neobanking challengers. Partner Ishaan Mittal, with nine years at the firm, specialized in consumer internet plays that scaled across Southeast Asia's fragmented markets. Tejeshwi Sharma, the third departing partner with over seven years of service, focused on B2B software companies leveraging India's engineering talent pool. Together, this trio championed a thesis centered on mobile-first, locally adapted technology solutions—a strategy that delivered outsized returns during India's 2020–2024 digital adoption surge but now faces pressure as AI reshapes capital allocation priorities.
Inside Peak XV's AI-First Transformation
Peak XV's strategic recalibration isn't happening in a vacuum. The firm is reallocating over 60% of its new deployment capital toward AI-native startups, particularly those building infrastructure layers, vertical-specific models for emerging markets, and tools addressing compute constraints in price-sensitive regions. This pivot reflects broader industry momentum: global AI venture funding surpassed $100 billion in 2025, with emerging markets capturing an expanding share as founders localize large language models for languages like Hindi, Bahasa, and Tamil. For Peak XV—which manages over $4 billion across funds—the shift represents both opportunity and risk. Doubling down on AI requires different skill sets than scaling consumer apps: deeper technical diligence, longer runway expectations, and comfort with hardware-adjacent business models. The departing partners reportedly favored maintaining balanced exposure across fintech, SaaS, and consumer sectors rather than concentrating risk in a single transformative technology.
Legacy Investments That Defined a Generation
Before the AI wave crested, Peak XV's partners built one of Asia's most enviable portfolios through contrarian timing and operational grit. Beyond Groww's blockbuster public listing, the firm backed unicorns like Meesho (social commerce), CRED (credit rewards), and Innovaccer (healthcare data)—companies that redefined category norms while navigating India's complex regulatory landscape. These investments shared a common thread: leveraging mobile penetration and digital identity infrastructure (like Aadhaar) to serve overlooked customer segments. The departing partners personally led board engagements through multiple funding cycles, often injecting hands-on operational support during critical scaling phases. Their legacy isn't just financial returns—it's a playbook for building defensible businesses in markets where unit economics remain challenging.
The Next Chapter: A New Firm Takes Shape
Rather than retiring or joining competitors, Agrawal, Mittal, and Sharma are launching their own venture firm focused on "founder-centric, category-defining companies" outside the AI hype cycle. In a carefully worded LinkedIn announcement, Agrawal framed the move as an "entrepreneurial plunge" to build an institution reflecting their shared investment philosophy. While specifics remain under wraps, sources indicate the new fund will prioritize sectors where human-centric design still outweighs pure algorithmic advantage: climate tech adaptation, healthcare access, and vernacular content ecosystems. This positioning creates an intriguing counter-narrative to Peak XV's AI concentration—a bet that not every problem requires an AI solution, especially in markets where basic digital infrastructure gaps persist.
What This Means for India's Startup Ecosystem
Partner departures at top-tier firms rarely occur without ripple effects. For founders in Peak XV's portfolio, continuity assurances should mitigate immediate concerns, but subtle shifts in boardroom dynamics may influence future funding decisions—particularly for non-AI companies seeking growth capital. More broadly, this split highlights a maturing tension within emerging market venture capital: how aggressively to chase frontier technologies versus doubling down on proven models adapted to local conditions. India's startup ecosystem has historically thrived by "frugal innovation"—doing more with less—but AI development demands substantial compute resources and specialized talent, potentially widening the gap between well-capitalized AI startups and capital-constrained traditional businesses. How Peak XV navigates this balance will signal whether emerging market VCs can lead in AI or merely follow Silicon Valley's playbook.
AI Investment Realities Beyond the Hype
The strategic divergence at Peak XV reflects a sobering reality beneath AI's funding frenzy: most emerging market AI startups face structural headwinds. Training competitive models requires access to Western cloud infrastructure or expensive local GPU clusters—neither abundant nor affordable across Southeast Asia. Many "AI-washing" startups rebrand existing automation tools as AI products to attract capital, creating diligence challenges for investors. Peak XV's doubling down suggests confidence in identifying genuine AI differentiation, particularly in areas like agricultural yield prediction using satellite imagery or vernacular voice interfaces for low-literacy users. Yet success requires patience; unlike mobile apps that scaled in 18 months, AI infrastructure plays may take five to seven years to mature—a timeline testing even seasoned VCs' resolve.
The Road Ahead for Peak XV
Despite the high-profile exits, Peak XV enters 2026 with significant momentum. Its early bets on AI infrastructure startups like Sarvam AI (Indian-language models) and Krutrim (compute-efficient training frameworks) are gaining traction as global tech giants seek localization partners. The firm's expansion into U.S. markets provides optionality to co-invest alongside American funds while maintaining India as its anchor geography. Internally, leadership has signaled stability by promoting operating partners with deep technical backgrounds to fill governance gaps. Most critically, Peak XV retains control of follow-on funding decisions for its existing portfolio—a powerful lever ensuring continued influence even as partner dynamics evolve. The true test arrives during the next market correction: will Peak XV's AI concentration prove visionary or vulnerable when capital tightens?
Evolution, Not Crisis
Venture capital has always been a relationship business built on shared conviction—and sometimes, diverging convictions. The departures at Peak XV reflect not dysfunction but evolution: a firm consciously choosing a narrower, higher-conviction path as markets transform. For founders, the lesson transcends this single event. In an era of technological acceleration, even the most successful investors must periodically reexamine core assumptions. The healthiest ecosystems accommodate multiple philosophies—those betting big on AI's potential and those patiently solving human problems with or without algorithmic assistance. As India's startup landscape matures beyond its mobile-first adolescence, such strategic diversity may prove more valuable than uniformity. Peak XV's pivot isn't an endpoint—it's a marker in venture capital's ongoing adaptation to a world where intelligence, artificial or otherwise, becomes the ultimate scarce resource.
