“This is not a disruption—it’s a sign that the ecosystem is evolving.”
That is how Deepak Gupta, General Partner at WEH Ventures, describes the recent wave of senior exits across India’s venture capital firms. What may appear as instability on the surface, he suggests, is in fact a natural outcome of a maturing market—one where ambition, access to capital and shifting power structures are beginning to realign.
India today hosts the world’s third-largest startup ecosystem, producing unicorns, attracting global investors and funding thousands of early-stage companies. Yet, the firms deciding where capital flows remain relatively concentrated—and are now undergoing a visible churn at the top.
To understand this moment, it helps to look back.
From scarcity to scale
India’s venture capital journey is relatively young. In the late 1980s, the government began recognising the potential of startups and small businesses to drive innovation and employment. In 1988, the country established its first institutional venture capital firm—the Technology Development and Information Company of India (TDICI)—focused on supporting technology-driven enterprises.
Over time, the ecosystem expanded. Venture firms such as Sequoia Capital India and Nexus Venture Partners backed emerging startups that would go on to become some of India’s most recognised technology successes, including Zomato, Flipkart and Ola.
As the IT and services sectors grew and the e-commerce economy took off, venture capital activity accelerated. Since 2016, India’s venture ecosystem has expanded rapidly, cementing its place as the third-largest startup hub globally.
But scale has brought complexity—and now, change.
The churn moment
Over the past two years, heightened churn has been visible across venture capital firms in India. Following a funding boom and a subsequent correction cycle, several marquee firms have seen Managing Directors, Partners and CEOs step away, reshaping leadership structures.
At the centre of this transition is Peak XV Partners, which has witnessed one of the most significant leadership reshuffles in the country.
Shraeyansh Thakur exited earlier this year after nearly a decade to pursue entrepreneurship. Managing Directors Piyush Gupta and Anandamoy Roychowdhary stepped down, while long-time MD Shailesh Lakhani, who spent 18 years at the firm, exited in 2024. Abheek Anand and Harshjit Sethi—both decade-long veterans—also moved on, alongside three additional Managing Directors (Ashish Agrawal, Ishaan Mittal and Tejeshwi Sharma) who stepped down this year.
Recently, Lakhani and Sethi partnered with Mayank Porwal, former vice president of Sequoia Capital, to launch the VC firm ‘Ambition Capital’, where they will back seed and Series A stage startups.
Yet, as Gupta points out, this is far from an isolated case.
Kalaari Capital saw Priyanka Gill exit after joining in 2024 to launch her own venture, Coluxe. Elevation Capital’s Partner and COO Vivek Mathur stepped down after 14 years to focus on advisory and mentorship. Mirae Asset Venture Capital saw CEO Ashish Dave exit after seven years.
Sameer Brij Verma, one of the MDs at Nexus Ventures Partners exited in 2024 to start his own investment fund.
What is unfolding, Gupta argues, is less about instability and more about structural reality.
Ambition meets structure
“In venture capital, professionals typically spend eight to ten years at a firm, build a track record, and then become highly marketable,” Gupta explains.
That track record opens doors—to launching independent funds, taking on larger roles, or building platforms with a distinct investment philosophy.
As firms grow larger, however, individual performance can become harder to distinguish from overall fund performance. “Even if an individual performs well, the fund may not,” Gupta says. “That creates misalignment.”
Large partnerships can also dilute autonomy. “Many ambitious investors want to run their own funds their own way—and most large firms don’t allow that within their structure.”
This, he adds, is not unique to India. In markets like the US, firms such as Sequoia and General Catalyst have regularly seen partner exits. It simply appears more pronounced in India today because the ecosystem itself is maturing.
A generational shift—or evolution?
While Gupta sees the churn as part of a broader structural pattern, Rajat Tandon, President of IVCA, frames it as both visible and inevitable.
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“This isn’t entirely new, but it is far more visible today,” he says, pointing to the rapid expansion of the ecosystem. With over 1,800 Alternative Investment Funds (AIFs) in India and a growing base of first-time fund managers, there are simply more opportunities for leadership mobility.
Tandon sees a generational layer to this shift.
“More operators and sector-focused investors are stepping into leadership roles. This reflects how the ecosystem is evolving,” he explains.
That evolution is changing expectations from leadership. Investment judgement alone is no longer sufficient. Firms are now seeking operating experience, sector depth and the ability to work closely with founders through scaling journeys.
At the same time, governance and institutional discipline are becoming equally important.
Economics, access and aspiration
For Saurabh Srivastava, co-founder and past chairman, NASSCOM and NASSCOM Foundation; Indian Venture Capital Association; co-founder of the Indian Angel Network, the shift is rooted in a more fundamental change: access.
“When we started, there were very few VC firms and almost no domestic capital,” he recalls. Funds had to raise money from overseas, making it difficult for professionals to break away and build something of their own.
Today, that constraint no longer exists.
According to data from the Department for Promotion of Industry and Internal Trade (DPIIT), as of January 31, 2026, the number of recognised startups in India has crossed 2 lakh. This is followed by a growing pool of domestic capital from institutions such as SIDBI, government-backed funds and state initiatives.
“With more capital available today—including family offices and corporate venture arms—many professionals feel they can raise capital independently and capture greater economic value,” Srivastava says.
At its core, he argues, the churn is about economics and aspiration.
“In most VC firms, the majority of the upside sits with founding partners. Senior professionals contribute significantly but may not participate equally.”
That imbalance is now being challenged.
The institutionalisation of venture capital
As venture capital firms scale, their structures are evolving.
Earlier, most firms operated as boutique setups with a handful of partners handling everything—from deal sourcing to portfolio management. Today, firms are far more layered, with sector-focused partners, operating teams and platform functions.
Jeet Chandan, Managing Director at Entremax Ventures, sees this as a sign of institutionalisation.
“After the aggressive investment phase between 2020 and 2022, the market has shifted toward disciplined investing and portfolio consolidation,” he explains.
The numbers reflect that shift. After a record funding boom in 2021, when startups raised over USD 40 billion, funding moderated to around USD 10–11 billion by 2025. Investors have become more selective, focusing on governance, profitability and long-term fundamentals.
“This is a reset,” Chandan says. “And leadership changes are a natural part of that process.”
Globally, similar patterns have been observed in mature markets such as the US and China, where periods of rapid growth are often followed by strategic recalibration and leadership transitions.
New skills, new leaders
As the ecosystem evolves, so do expectations from leadership.
“Venture firms are redefining leadership to combine investment judgment with operating expertise,” Chandan explains.
Today’s leaders are expected to bring not just financial acumen but also experience in scaling startups, along with domain expertise in areas such as artificial intelligence, deep tech and climate innovation.
Artificial intelligence (AI) startups in India accounted for about 12.3% of total VC funding in 2025, up from under 5% in 2020, highlighting their rise as a key investment theme, according to the India Deep Tech Alliance.
This shift is also enabling younger leaders to step into more prominent roles.
“The newer generation is closer to emerging sectors and technologies,” Chandan says. “That gives them an edge.”
However, the transition is not without trade-offs. While new leadership can bring fresh perspectives and stronger founder alignment, it can also disrupt institutional memory and investor relationships.
Churn as a signal, not a symptom
Despite differing lenses, there is broad agreement that churn is not necessarily negative.
Gupta views it as a sign of a more distributed ecosystem. “If capital becomes less concentrated among a few large firms, it leads to greater diversity of ideas, more funding sources and higher risk-taking.”
Srivastava echoes that sentiment. “More VC funds mean more capital for startups and more diversity in investment approaches.”
Even Tandon sees it as part of a natural growth cycle. In more mature markets, the number of investment platforms is significantly higher—often 10 to 15 times India’s scale—suggesting there is still considerable headroom for expansion.
Yet, not everyone sees it as entirely benign.
Ninad Karpe, Partner at 100X.VC and Founder of Karpe Diem Ventures, offers a more balanced view.
“Some churn is healthy—it brings new ideas and prevents complacency,” he says. “But excessive churn can create uncertainty because venture capital depends heavily on long-term relationships.”
Because India’s ecosystem is still relatively small, even a handful of senior exits can appear amplified. Once a few visible leaders move, it can trigger a signalling effect across the ecosystem.
What comes next
Looking ahead, most experts agree that churn will continue—at least in the near term.
The combination of abundant capital, rapid startup growth and increasing ambition is likely to keep leadership movement high.
However, over time, the ecosystem is expected to stabilise.
As firms become more institutionalised—with clearer succession planning, stronger governance and more structured leadership pathways—the intensity of churn may reduce.
But it will not disappear.
As Srivastava puts it, “This is not a problem—it’s a phase.”
India’s venture capital ecosystem, still in its adolescence, is learning to balance ambition with structure, and scale with stability.
And in that journey, churn may not be a sign of disruption—but of arrival.
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