Elevation Capital has raised a $500 million India-focused Fund IX, strengthening its commitment to early-stage startups while betting that artificial intelligence (AI) will power the next generation of large technology companies emerging from India.

The new Elevation Capital Fund IX comes more than four years after the firm’s previous $670 million Fund VIII. Although the latest fund is smaller, the venture capital firm said investors should view it alongside Elevation Holdings, its recently launched $400 million late-stage investment vehicle. Together, the two funds provide a combined investment corpus of $900 million across the startup lifecycle.

“We are following a barbell approach,” Mukul Arora, Co-Managing Partner, Elevation Capital, told in an interview. “Elevation Capital IX will remain sharply focused on Seed and Series A opportunities, while Elevation Holdings will partner with category leaders well beyond their IPO. Across the two funds, we will be investing from a combined pool of $900 million.”

The fundraising comes at a time when the venture capital ecosystem remains mixed. While macroeconomic uncertainty, rupee depreciation and cautious public markets have delayed late-stage funding and IPO activity, early-stage investments, particularly in AI-native startups, have continued to remain resilient.

Highlighting the firm’s investment strategy, Mridul Arora, Partner, Elevation Capital, said the company intends to remain highly active in the early-stage ecosystem.

“We continue to be very active on the early-stage side. The funding environment is fairly vibrant,” he said. He added that the firm continues to complete around 15-18 investments annually and expects to maintain that pace. “We are very aggressive.”

Traditionally, Elevation Capital invested $2-5 million in early-stage startups. However, the firm has now increased its cheque size to as much as $10 million as competition for high-quality startups intensifies and funding requirements continue to evolve in India’s startup ecosystem.

Unlike previous technology cycles driven by internet penetration and smartphone adoption, Elevation Capital believes AI represents a transformational platform shift capable of democratising expertise across industries such as healthcare, financial services and education.

“We are all in on India. We’ve said this before, but we mean it even more now,” Mridul Arora said. “Our investment activity reflects where GDP and value creation in India will happen. AI cuts across all of these sectors, and almost two-thirds of the investments we’ve made over the last 12-18 months have been AI-native in nature. This will continue to be the case.”

Instead of allocating a separate portion of the $500 million fund exclusively to AI, Elevation Capital expects artificial intelligence to become an integral technology layer across nearly every startup it supports.

Explaining the firm’s long-term outlook, Mukul Arora said AI could democratise expertise in much the same way that mobile internet democratised connectivity.

“For the first time, expertise is getting commoditised,” he said. “Can a great doctor serve ten times more patients with AI? Can every Indian have access to better teachers and financial advisors? These are much harder problems, but AI makes them solvable for the first time.”

The firm’s investment priorities include enterprise AI, AI applications for India, fintech, consumer technology, healthcare, education and emerging deeptech sectors such as robotics, defence, advanced manufacturing and space technology.

Elevation Capital also rejected the notion that India’s AI opportunity remains smaller than Silicon Valley’s. Although the firm has expanded its presence in the San Francisco Bay Area, it said the objective is to help Indian entrepreneurs build globally competitive AI companies rather than invest in American startups.

“We want Indian companies to be on the global map,” Mukul Arora said. “If you’re a founder in India building for the world, we want to be the platform that helps you compete with the best companies globally,” he said in the interview.

“India has created a playbook for the world when it comes to software and building world-class companies and global companies,” he added.

The firm’s leadership also identified deeptech as an increasingly important investment theme while acknowledging the need to strengthen its expertise in the sector.

“Deep tech is one area where we need to strengthen further. And we will be focusing on that going forward. We are seeing very early green shoots,” Mridul Arora said.

According to Mukul Arora, existing limited partners contributed almost the entire $500 million fund despite continued scrutiny over returns because of the depreciation of the Indian rupee.

“Rupee depreciation is, of course, a factor,” he said. “We still have to generate returns that meet our LPs’ expectations.”

Looking ahead, Elevation Capital remains optimistic about India’s entrepreneurial future.

“We believe the next decade will be India’s golden decade,” Mukul Arora said. “It won’t be easy, and all of us, including Elevation, will have to step outside our comfort zones. But if we do that, this decade will surprise everyone on the upside.”

The launch of Fund IX reinforces Elevation Capital’s long-term confidence in India’s startup ecosystem. By prioritising AI, deeptech and early-stage innovation while deploying a combined $900 million across the startup lifecycle, the firm aims to back the next generation of globally competitive technology companies emerging from India.