Peak XV Partners, one of India’s leading venture capital firms, is facing major turbulence as multiple top partners exit the firm. Differences over Groww payouts and carried interest in a new fund have triggered a wave of departures, raising questions about the fund’s stability and future investment strategies.
Recent Departures Shake Peak XV Partners
Up until a few months ago, Peak XV Partners had up to 15 partners and managing directors. But in the last few months, eight Partners/MDs have left the company, including three high-ranking employees earlier this week. Meetings are over. Nearly received funding pledges. Final paperwork is awaiting signatures.
One of the most active startup investors in India, Peak XV Partners, had completed nearly all the requirements for its new $1.2–1.4 billion venture fund when it encountered an avalanche.
Top Executives Depart to Launch New Fund
Together, Ashish Agrawal, Ishaan Mittal, and Tejeshwi Sharma, three managing directors, made the decision to leave the company and start their own fund. The venture capital and startup community was rocked by their departure, which occurred halfway through a new fundraising cycle. Moneycontrol was the first to publish this development on February 3.
In order to piece together the reasons behind the departure of Peak XV’s top performers, we consulted with at least eight leaders from India’s venture capital and startup community. Ishaan Mittal was an early backer of another fintech success story, Razorpay, a $7 billion fintech major currently preparing for an IPO, while Ashish Agrawal produced one of the firm’s biggest results with its bet on Groww, a Rs 230 crore investment that multiplied 75X into a Rs 17,300 crore outcome for Peak XV in the last year.
Disagreements Over Carried Interest and Payouts
Three developments seem to have come together as a result of these discussions. Disagreements over disbursements related to the Groww conclusion and how profits and carried interest in the new venture fund should be structured caused the situation to escalate during the last three to four days.
The money venture capitalists receive from investment earnings is known as carried interest, or carry. This money is frequently in the millions.
Up until around a week ago, all partners were in agreement. However, over the course of the previous five to six days, tensions increased, and Ashish abruptly resigned, with the other two following suit, according to a person familiar with the situation.
Economic Disputes Behind the Departures
Although Groww was unquestionably a successful conclusion, gains at a venture business could not be assigned to a single person, according to another source briefed on the proceedings.
“There are several contributors: the person who finds the deal, the person who writes the check, the person who chooses subsequent investments, and the people who assist the portfolio firm in areas like operations, finance, and talent. The individual said that the disputes were of an economic nature and that “the institution is larger than any one individual.”
According to insiders, there were two types of “economic disagreements”: Agrawal’s portion of carried interest in the new fund and incentives and rewards associated with the outsized Groww outcome.
A third party stated that the demand for a larger share of carry in the new fund was made at a time when most limited partner conversations were almost complete and paperwork was almost ready to be signed.
🚨 Peak XV Partners Departure Highlights
- Partners Exited: Ashish Agrawal, Ishaan Mittal, Tejeshwi Sharma
- Reason: Economic disputes over Groww payouts & carried interest
- Impact: Raises concerns over fund stability & future investments
- Fund Size: $1.2–1.4 billion venture fund
- Background: Groww 75X return, Peak XV early backer
Leadership and Investor Reactions
Sources claim that the main source of conflict was between Agrawal and the senior partners of Peak XV. “Ishaan and TJ did not participate in the new venture fund; they are members of the growth funds. However, a fourth person stated that the three had been close friends for almost 15 years and that Ashish’s departure served as the catalyst for them to part ways and go it alone.
Moneycontrol sent questions, but Peak XV Partners did not reply. Beyond what he posted on social media about his leaving and future, Agrawal declined to comment.
However, Shailendra Singh, managing director of Peak XV Partners, stated in media interviews that the departures were due to “economic differences” with Agrawal without providing any other information.
High Partner Turnover in Recent Months
Up until a few months ago, Peak XV Partners had up to 15 partners and managing directors. But in the last few months, eight Partners/MDs have left the company, including three high-ranking employees earlier this week.
These departures are on top of the turnover in the investing team’s mid-management layer and other departures in non-investing departments, such as the head of marketing and policy functions, among others.
Impact on Fundraising and LP Confidence
Partner withdrawals at venture capital funds are not new or unusual, but when a number of the fund’s top-performing partners leave in quick succession, fund sponsors, also known as limited partners (LPs), raise more serious concerns about future bets and the possibility of receiving disproportionate returns from them.
Groww was one of the largest successes for a VC circle investor, and Peak was one of the company’s early backers, having made an investment six or seven years prior.
Financial Details of Groww Investment
According to current stock prices, Peak XV will make around Rs 17,300 crore (almost $2 billion) on an investment of only Rs 230 crore (roughly $26 million based on the USD/INR exchange rate six years ago), a 75X return in record time.
The direction of the stock price will affect the outcome’s value. By selling shares as part of the offer for sale (OFS) component during Groww’s IPO in November, Peak has already pocketed gains of about Rs 1,500 crore (roughly $180 million) of the total stake. This represents an 8X return, and according to a back-of-the-envelope calculation, it still holds a sizable share in the company.
💼 Peak XV Future Plans & Fund Launch
- New Fund: Ashish Agrawal, Mittal & Sharma planning equal partnership fund
- Location: Bengaluru-based setup
- Status: Fundraising process in early discussions
- Potential Impact: Could raise concerns among LPs about Peak XV stability
Current Leadership at Peak XV
Top executives including Piyush Gupta, Abheek Anand, Anandamoy Roychowdhary, Shailesh Lakhani, and Harshjit Sethi have all departed Peak XV Partners throughout the last two years or so. Of those, Lakhani and Sethi are in the process of starting and seeking capital for a deep tech fund, whilst Gupta has already started his fund.
The current disturbances at Peak are similar to what happened before it broke away in 2023 when it was Sequoia Capital India.
Top executives like Sandeep Singhal, SK Jain, KP Balaraj, and Sumir Chadha left to create WestBridge Capital in 2011. However, Abhay Pandey, Gautam Mago, and VT Bharadwaj departed the VC fund in 2018 to create A91 Partners. A91 Partners and Westbridge Capital are two of the most successful and well-known investors in the nation right now.
Internal Promotions and Stability Efforts
Today, Shailendra J. Singh, GV Ravishankar, and Mohit Bhatnagar lead Peak XV’s growth funds. While Ravishankar moved to Dubai a few years ago and is currently returning to Bengaluru, Singh has been headquartered in Singapore and is increasingly spending time in the US to concentrate on AI bets. The headquarters of Bhatnagar are in New Delhi. Surge is a very early-stage program that Rajan Anandan oversees.
As part of its announcement yesterday, Peak XV internally promoted Abhishek Mohan from Principal to Managing Director and General Partner in the venture team, and Saipriya Sarangan from Chief People Officer to Chief Operating Officer. However, it is unclear how Singh and GV will improve stability and investor confidence in the upcoming months.
Significance of Peak XV in Indian Startup Ecosystem
Based on a rough estimate, Peak XV represents around one-fifth of the total funds invested in the Indian startup ecosystem. Since its founding approximately 17 years ago, it has made investments in more than 400 businesses from 16 funds, more than 23 of which have gone public and more than 50 of which are unicorns. It currently oversees assets worth over $9 billion. For the Indian startup ecosystem, its stability will be crucial.
Frequently Asked Questions
1. What caused several partners to leave Peak XV Partners recently?
Economic disputes caused a number of senior partners to depart, mostly over payouts related to Groww’s disproportionate returns and the carried interest structure in a new venture fund.
2. How did these departures relate to the Groww investment?
With over a 75X return, Groww was one of Peak XV’s greatest achievements. There were disagreements on how much credit, payout, and carry should go to the investment-leading partner as opposed to the larger company.
3. Which important partners left Peak XV?
Tejeshwi Sharma, Ishaan Mittal, and Ashish Agrawal, the managing directors, left together. While Mittal was an early supporter of Razorpay, Agrawal was actively involved in the Groww investment.
4. What effect might these departures have on Peak XV’s continued fundraising efforts?
Limited partners (LPs) were concerned about stability, continuity, and the size of the surviving investment team because the departures occurred during an active fundraising cycle.
5. Do venture capital organizations frequently experience this type of partner turnover?
Although partner departures are common in venture capital companies, the departure of several high-performing partners in a short period of time can raise LPs’ suspicions and undermine investor confidence.
Conclusion
Peak XV Partners’ departures highlight the increasing complexity of big venture capital companies, particularly when historic results like Groww provide enormous profits. Even in reputable institutions, disagreements over attribution, rewards, and carried interest can swiftly spiral out of control.
The current upheaval puts pressure on Peak XV’s leadership to restore stability and reassure investors, even if the company is still one of the most significant participants in India’s startup sector. However, history indicates that these departures frequently result in the establishment of new, prosperous funds, therefore the ramifications of this incident may influence India’s venture capital scene for years to come.
Disclaimer: This article is for informational purposes only and does not constitute investment or professional advice. Readers should consult a qualified financial advisor before making any investment decisions.
