Harshjit Sethi, managing director at Peak XV Partners, has resigned from the venture capital firm, according to two sources.

Sethi led AI investments at Peak XV and held board positions at companies including Sarvam.

He also invested in BharatPe, a fintech firm that faced legal disputes involving its founder Ashneer Grover, which were settled by the parties in September 2024.

Sethi will serve a gardening leave before leaving the firm.

He did not specify his next plans.

🔗 Source: The Economic Times

🧠 Food for thought

1️⃣ Leadership turnover often signals strategic pivot in venture capital

Peak XV’s recent wave of departures reveals how major VC firms restructure when market conditions shift dramatically.

The firm has seen multiple senior exits within months, including managing partners Shailesh Lakhani and Abheek Anand in February 2025, followed by Shraeyansh Thakur after a decade, and now Sethi12.

These departures coincide with Peak XV downsizing its $2.85 billion fund by 16% and reducing management fees to adapt to changing market conditions1.

This demonstrates how venture capital firms often experience leadership churn when transitioning from aggressive growth strategies to more conservative approaches.

The timing suggests these exits are strategic, as the firm shifts toward emphasizing profitability and capital efficiency in response to the current “funding winter”1.

2️⃣ Venture capital’s profitability pivot reshapes investment strategies

Sethi’s departure comes as the entire Indian startup ecosystem moves away from a growth-at-any-cost mentality toward sustainable business models.

The shift is driven by rising capital costs and the reality that many founders now recognize the need for profitable businesses, particularly as they aspire to achieve strong valuations for potential IPOs3.

Recent Peak XV Partners developments