Elevation Capital launches $400 million fund to invest in IPO-bound startups

Gurugram-based early-stage investment firm Elevation Capital is expanding its investment strategy beyond its core early-stage focus.

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The VC firm has launched a $400 million fund, Elevation Holdings, that will take concentrated, long-duration positions in Indian technology companies approaching public markets.

The fund plans to invest between $20 million and $50 million across 10 to 15 companies, targeting consumer and financial services businesses with a technology backbone. Unlike traditional growth vehicles, Elevation Holdings is designed to hold shares well past an IPO, with time horizons of 10 to 15 years or longer.

“Our horizons for investments are much longer and we will hold long enough to be considered permanent holders of the stock,” said Mridul Arora, partner at Elevation Capital.

“For founders at that stage, many interactions are with public market investors focused on quarterly performance. We want to be partners in thinking about the longer term.”

Elevation’s new fund will run alongside its $670 million Fund VIII, which focuses on early-stage investments of $2 million to $5 million. The firm has already made its first investment from the late-stage vehicle in used-car marketplace Spinny, and it is open to backing companies outside of its existing portfolio.

Mukul Arora, Elevation’s co-managing partner, said the vehicle reflects a belief that India’s technology sector now has companies capable of compounding value in the way legacy firms such as Asian Paints, Titan and HDFC Bank have done for decades.

“This is for the first time, we feel that there are some companies in our technology ecosystem that can reach that level of maturity,” he said.

Elevation Holdings will focus on businesses not more than three years away from a listing, and that are either profitable or close to profitability. Candidates from the firm’s portfolio, such as Meesho, Urban Company, Wakefit and Aye Finance, are among those preparing to go public. Elevation has also invested in listed firms, including FirstCry, ixigo, MakeMyTrip and Paytm, recently making partial exits from Ixigo.