 Morning Dispatch |
Elevation’s new India fund; InsuranceDekho charts D-Street path
Want this newsletter delivered to your inbox?
I agree to receive newsletters and marketing communications via e-mail
Thank you for subscribing to Morning Dispatch
We'll soon meet in your inbox.
Happy Tuesday! Elevation Capital is looking to back early-stage AI startups in India from its newest fund. This and more in today’s ETtech Morning Dispatch.
Also in the letter:
■ Govt seeks Mythos-like local model
■ HCLTech’s Q1 report
■ Ather Energy’s fundraising bid
Mukul Arora (left) and Mridul Arora, partners, Elevation Capital
Venture capital firm Elevation Capital has closed a $500 million fund to back early-stage startups as it hunts for the next wave of AI-led companies emerging from India.
Fund details: This is the firm’s ninth fund and is skewed towards the early stages.
India focus: With this fund, Elevation’s aggregate India capital commitment rises to $900 million, making it the country’s second-largest dedicated venture corpus after Peak XV Partners, which closed a $1.3 billion fund this February.
Quote, unquote: “Historically, India hasn't had the same depth of frontier LLM research talent. When OpenAI emerged, enormous amounts of capital flowed in, enabling it to move fast. We weren’t playing to our strengths then,” co-managing partner Mukul Arora told us, adding that the opportunity now lies in building on top of these models.
VC interest: Multiple venture firms are reworking their India strategies with more focused, often leaner funds:
InsuranceDekho is gearing up to file its draft red herring prospectus (DRHP) by the end of September, joining a growing list of new-age financial-services firms queuing up for the public markets. The insurance distributor is targeting an initial public offering (IPO) by March 2027.
The IPO plan:
Vivek Raghavan and Pratyush Kumar, founders, Sarvam AI
The government has nudged homegrown AI firms Sarvam and BharatGen to tweak their foundation models and build Mythos-like capabilities to protect critical infrastructure from cyberattacks, top officials told us.
Why this push: The objective is clear: host powerful, indigenous models on India’s own isolated compute infrastructure – and get Mythos-class outcomes without depending on a foreign, restricted system.
“The tweaks in the models being worked upon, we are trying to speed up the development process,” the person added. The “models” should be deployed soon, he said, without giving a deadline.
Tell me more: This comes as the Centre and local firms attempt to secure access to Mythos, currently the most powerful AI model available, but with highly restricted access.
Some Indian public sector entities and banks were supposed to be part of the expanded access, but there is still no clarity on when – or if – that will kick in.
Patchwork defence: For now, the government is relying on a mix of open-source and indigenous LLMs to guard public infrastructure. “Even the Chinese government can overnight stop access to its open-source models. So, India definitely needs powerful models,” said another official.
C Vijayakumar, CEO, HCLTech
HCLTech posted growth in both profit and revenue for the first quarter of FY27.
Financials:
Headcount: HCLTech's workforce shrank by a net 3,292 employees during the quarter, marking its sharpest quarterly decline in at least the past five quarters.
Venugopal Lambu, CEO, LTIMindtree
AI-fuelled price compression in IT services may finally be easing, LTM CEO Venugopal Lambu told ET.
Verbatim: With the firm’s two major revenue engines back to steady growth, Lambu told ET that the worst of AI-led revenue deflation appears to be over.
"In some of its biggest segments and bigger customers, that is behind us. We have navigated the journey," he said.
Ather Energy board to consider fundraising proposal: Electric two-wheeler (e2W) maker Ather Energy's board will meet on July 15 to consider and approve raising funds through equity shares, foreign currency convertible bonds (FCCBs) and other equity-linked securities, the company said in a stock exchange filing.
CERT-In executive on cyber threats: AI is rapidly reshaping the cyber threat landscape, making even familiar attacks such as phishing harder to detect, Indian Computer Emergency Response Team (CERT-In) director general Sanjay Bahl told ET. He said organisations must strengthen basic cyber hygiene, continuous monitoring and regular cybersecurity drills to stay protected.
■ Uber’s autonomous vehicle strategy: Slow their adoption (Wired)
■ India’s crackdown on a new WhatsApp feature risks setting a global precedent (Rest of World)
■ See if you can spot an AI deepfake with our test (BBC)
Also in the letter:
■ Govt seeks Mythos-like local model
■ HCLTech’s Q1 report
■ Ather Energy’s fundraising bid
Elevation Capital closes $500 million India fund; to back startups building on AI’s app layer
Venture capital firm Elevation Capital has closed a $500 million fund to back early-stage startups as it hunts for the next wave of AI-led companies emerging from India.
Fund details: This is the firm’s ninth fund and is skewed towards the early stages.
- Focus: Seed and Series A investments
- Thesis: AI-led businesses solving complex challenges in healthcare, education, and financial services.
- Scope: Global AI software companies being built out of India.
- Beyond software: Deeptech bets across space, defence, robotics, energy, and precision manufacturing.
India focus: With this fund, Elevation’s aggregate India capital commitment rises to $900 million, making it the country’s second-largest dedicated venture corpus after Peak XV Partners, which closed a $1.3 billion fund this February.
Quote, unquote: “Historically, India hasn't had the same depth of frontier LLM research talent. When OpenAI emerged, enormous amounts of capital flowed in, enabling it to move fast. We weren’t playing to our strengths then,” co-managing partner Mukul Arora told us, adding that the opportunity now lies in building on top of these models.
VC interest: Multiple venture firms are reworking their India strategies with more focused, often leaner funds:
- Peak XV Partners: Closed a $1.3 billion India fund in February, compared with a $2.8 billion vehicle in 2022.
- Lightspeed: Is planning to raise a $300-350 million India fund, down from its previous $500 million corpus.
- Nexus Venture Partners: Raised a $700 million fund in December, matching the size of its prior fund.
InsuranceDekho targets Rs 2,500-3,000-crore IPO, plans September filing
InsuranceDekho is gearing up to file its draft red herring prospectus (DRHP) by the end of September, joining a growing list of new-age financial-services firms queuing up for the public markets. The insurance distributor is targeting an initial public offering (IPO) by March 2027.
The IPO plan:
- The Gurgaon-based company plans to raise Rs 2,500-3,000 crore at a valuation of around Rs 9,500 crore. The offer structure is expected to rely on a sizeable fresh issue and an offer-for-sale by early investors.
- InsuranceDekho does not intend to run a pre-IPO round. It will deploy fresh capital towards technology investments, acquisitions, and expansion into adjacent financial-services verticals.
- The company, incubated within the CarDekho group, will list independently. CarDekho, meanwhile, is also preparing its own IPO and is expected to file its papers by August, as ET reported on July 9.
- InsuranceDekho is working to close its merger with RenewBuy after securing approvals from the Competition Commission of India and in-principle clearance from the country's insurance regulator.
- The deal valued the combined entity at Rs 7,400 crore as of May last year – well below the Rs 9,500 crore valuation the company now wants to test in the IPO market.
- The merged business recorded Rs 6,700 crore in premium and business-level profitability in 2025-26.
- InsuranceDekho faces off against players such as Turtlemint and Policybazaar in India’s online insurance distribution market.
Govt working with Sarvam and BharatGen for Mythos-like models
The government has nudged homegrown AI firms Sarvam and BharatGen to tweak their foundation models and build Mythos-like capabilities to protect critical infrastructure from cyberattacks, top officials told us.
Why this push: The objective is clear: host powerful, indigenous models on India’s own isolated compute infrastructure – and get Mythos-class outcomes without depending on a foreign, restricted system.
“The tweaks in the models being worked upon, we are trying to speed up the development process,” the person added. The “models” should be deployed soon, he said, without giving a deadline.
Tell me more: This comes as the Centre and local firms attempt to secure access to Mythos, currently the most powerful AI model available, but with highly restricted access.
Some Indian public sector entities and banks were supposed to be part of the expanded access, but there is still no clarity on when – or if – that will kick in.
Patchwork defence: For now, the government is relying on a mix of open-source and indigenous LLMs to guard public infrastructure. “Even the Chinese government can overnight stop access to its open-source models. So, India definitely needs powerful models,” said another official.
HCLTech Q1 profit jumps 20%; revenue rises 13%
HCLTech posted growth in both profit and revenue for the first quarter of FY27.
Financials:
- Net profit: Up 20% year-on-year (YoY) at Rs 4,624 crore vs Rs 3,843 crore a year ago.
- Revenue from operations: Up 13% YoY at Rs 34,579 crore vs Rs 30,349 crore a year ago.
- Interim dividend: Rs 12 per share, with July 17 fixed as the record date.
Headcount: HCLTech's workforce shrank by a net 3,292 employees during the quarter, marking its sharpest quarterly decline in at least the past five quarters.
AI-led deflation is behind us, says LTM’s Lambu
AI-fuelled price compression in IT services may finally be easing, LTM CEO Venugopal Lambu told ET.
Verbatim: With the firm’s two major revenue engines back to steady growth, Lambu told ET that the worst of AI-led revenue deflation appears to be over.
"In some of its biggest segments and bigger customers, that is behind us. We have navigated the journey," he said.
Other Top Stories By Our Reporters
Ather Energy board to consider fundraising proposal: Electric two-wheeler (e2W) maker Ather Energy's board will meet on July 15 to consider and approve raising funds through equity shares, foreign currency convertible bonds (FCCBs) and other equity-linked securities, the company said in a stock exchange filing.
CERT-In executive on cyber threats: AI is rapidly reshaping the cyber threat landscape, making even familiar attacks such as phishing harder to detect, Indian Computer Emergency Response Team (CERT-In) director general Sanjay Bahl told ET. He said organisations must strengthen basic cyber hygiene, continuous monitoring and regular cybersecurity drills to stay protected.
Global Picks We Are Reading
■ Uber’s autonomous vehicle strategy: Slow their adoption (Wired)
■ India’s crackdown on a new WhatsApp feature risks setting a global precedent (Rest of World)
■ See if you can spot an AI deepfake with our test (BBC)
Want this newsletter delivered to your inbox?
I agree to receive newsletters and marketing communications via e-mail