How Peak XV’s Shailendra Singh is building the firm for the next decade

Celebrating two decades of its presence in India, Peak XV (formerly Sequoia Capital India) plans to continue backing category-defining companies and corner large stakes by doubling down. In an interview with Mint, Shailendra Singh, the company’s managing director and one of its founding members, talks about the sunrise sectors the firm is betting big on and what keeps it on its toes.

Edited excerpts:

Peak has achieved phenomenal success over the last half-decade. How do you think this journey turned out for the company?

Next year we will celebrate twenty years in India. The early years were not easy. India was still a small market with a very young technology ecosystem. At the same time, it was a privilege to be so early because it allowed us to establish partnerships with companies that would later lay the foundations. Many of them were doing well in the field, but as investors it was still difficult. Liquidity was limited, capital markets were underdeveloped, and the scale of venture-backed results people talk about today was not yet visible.

What has changed in the ecosystem to deliver the large-scale results we see today?

As of December 2015, we had only two private portfolio companies in excess of one hundred million dollars in annual revenue. Over the last decade that number has grown to several dozen, with many now consistently exceeding $100 million. For us, this is a very important sign. At this scale you start to see operating leverage. Revenue increases, profitability begins to improve, and pathways to meaningful exits IPOs or private equity are opened. We see this as the first signal that the ecosystem is entering a more mature phase.

Many of the subcategories we have supported over the last decade have scaled much more than anyone expected. This is the great story of India. Things often take longer than expected, but if you’re patient the end results can be surprisingly great.

And do you see this repeated over and over again?

For most large companies, the first ten years are the foundation, and the second decade is when a disproportionate amount of market value is created. The question is whether a company can become an enduring institution and whether its second and third decades can be as strong or stronger than the first.

On the investment side, it never feels like a smooth compound curve because the venture is cyclical in nature. There are periods of enthusiasm and then periods of volatility. In this context, India has actually been less cyclical in both private and public markets.

So can only innovative startups reach this scale?

We believe that a startup needs a disruptive mindset in the beginning and a disciplined mindset when it turns into a real business. When a company has thousands of employees, it needs a dual mindset of discipline and disruption to build something that lasts. This is also one of the biggest mistakes start-ups make; many remain in the blitz-scaling, growth-at-all-costs stage and fail to make the transition.

We’ve seen venture capitalists guide companies to profitability over the past few years as the funding winter has set in.

The founders are fiercely independent people. They have a very specific vision of the world they want to create. They seek advice, but as investors we must respect and protect this independence. This is one of the main differences between private equity and venture capital. Private equity is oriented towards ownership and control, and firms often work very closely with the CEO within the business. Inside Our role as venture capital is to moderately support the founder and help him or her grow to greater heights. Founders often stay in the driver’s seat.

Some sectors, especially gig commerce, face a race to the top where large amounts of capital are raised and burned to stay ahead of the competition. I know you don’t currently have any investments in this segment, but what is your view on this?

No permanent company can be built on the idea of ​​constantly raising capital without achieving profitability. Running a loss-making business is only a temporary strategy. Abundance of global risk Capital has sometimes created the mindset that companies can burn cash for 7-10 years, but that was never the goal. Once a business reaches triple-digit million-dollar revenue, it should be able to break even or generate modest cash flow in most categories. This discipline is ultimately what keeps a company going.

The key question in gig trading is what the industry structure will look like five to ten years from now. Is this a market that can support multiple profitable players, or will it coalesce around one or two players? Price wars are always temporary and rarely healthy for an industry. Currently, behavior is influenced by the availability of venture capital. When the dust settles, one company will likely have a very large share of the market, perhaps with one or two smaller but meaningful competitors.

Has the thesis of Peak XV evolved over the years? How different will the next 10 years be in terms of the industries you look at?

We prefer to support businesses with strong moats, consistent mixes, clear economic models and a long-term orientation. Our focus areas include fintech, artificial intelligence, software and consumer. Deeptech has become an important new pillar where we invest in precision manufacturing, aerospace and semiconductors. We generally avoid structurally low-margin industries, categories dominated by price wars, and areas like logistics unless we see something truly distinctive.

What about artificial intelligence?

We are very focused AI. There are parts of the ecosystem that scale aggressively with high burn, but many companies in the application layer or adjacent infrastructure are growing rapidly without burning a lot of capital. Artificial intelligence has accelerated technology adoption by significantly shortening time to value. Implementation, configuration and change management can now be carried out much faster and more efficiently. This is often one of the largest cost items on a software company’s profit and loss statement. Reducing this cost made much faster and more profitable growth possible. One thing markets have underestimated is how quickly this wave of AI will democratize globally. It may begin with a concentration of activity in the United States, but it will spread very quickly.

How are things going across the border?

Before making any investments in the United States, we hired three senior operators who can help our companies increase revenue and attract talent in this market. We are seeing a strong wave of global innovation emerging from India, Singapore and the broader Asia-Pacific region. Many of these companies are now ready to start in the US and need support there. Our US cross-border initiative, which we established last year and is accelerating with the AI ​​cycle, remains a priority. At the same time, our core focus on India and the Asia-Pacific across sectors remains unchanged.

What keeps an investor like you awake at night?

What keeps me awake at night are forces we cannot control. The last five years have been shaped by significant geopolitical changes. The pandemic, trade tensions and other disruptions have pushed the world in unexpected directions. These changes affected our founders and put real pressure on many companies. With a large and diverse portfolio, any global shock will affect some portion of the portfolio. How we can remain institutionally strong and consistently confront the founders throughout these periods is our constant question.

Are you expanding your team?

We are expanding our scope but not necessarily increasing our headcount. We believe that good companies should have lean teams. We try to follow the same advice we gave to our founders. Therefore, while expanding our investment horizons, we are conscious of keeping the team focused, tight and highly committed.