Bengaluru's Activate closed its first fund on September 17 at $105 million — 125% above the target it set when it launched nine months earlier. In almost any other year that would be an unremarkable data point. In 2026, it is close to an anomaly: first-time fund formation in the United States is on pace for its lowest year since 2016, and through May, established firms had absorbed 90.9% of every dollar committed to US venture funds.
Activate raised anyway, and it raised on an AI thesis. That combination — emerging manager, AI mandate, oversubscribed close — is the narrow doorway through which almost all new venture capital is now passing.
The fund
Activate was founded in December 2025 by Aakrit Vaish, who built the conversational AI company Haptik and sold it to Reliance Jio in 2019, and Pratyush Choudhury, previously a partner at Together Fund and before that at AWS. The pair launched the vehicle publicly with a $75 million target, announced by Vaish on X, and reported a first close at that figure in December, according to Inc42.
The final structure splits into an $85 million flagship early-stage fund and roughly $20 million deployed through dedicated growth vehicles. First cheques run $500,000 to $3 million, and the firm is targeting 25 to 30 companies in total across AI applications, foundational models and physical infrastructure. The early-stage strategy is branded "Inception," and the pitch is unusually far upstream: Activate says it works with founders from the ideation stage, in some cases before incorporation.
The LP base is the more interesting disclosure. Activate reports more than 50 founders and AI researchers, around a dozen general partners at global VC firms, and more than 50 family offices, enterprises and corporates. Named backers include Vinod Khosla, General Catalyst, Vijay Shekhar Sharma, Ronnie Screwvala, Bhavin Turakhia, Lalit Keshre, Harsh Jain, Raghu Raghuram and Ranjan Pai. At launch, Entrackr reported the roster also included Perplexity's Aravind Srinivas, Essential AI's Ashish Vaswani, Peak XV's Shailendra Singh and MIT Media Lab's Ramesh Raskar.
Ten investments have closed in nine months: seven early-stage bets, all still in stealth, plus growth positions in Sarvam AI, ElevenLabs and Wispr Flow. The firm has also built a services layer around the capital — a February partnership with NVIDIA for access to its Nemotron open models and compute, plus arrangements with OpenAI, Anthropic, AWS, Microsoft Azure and Google Cloud worth up to $1 million in credits per portfolio company.
The rest of the day's sheet
Activate was the largest item on a busy September 17 in Indian venture. VerifAIX, an AI-native semiconductor verification company founded in 2024 by Madhulima Tewari, Kenneth Roe and Avner Landver, announced $5 million in seed funding co-led by Endiya Partners and Bluehill VC — its first institutional round.
VerifAIX is selling a specific consequence of the AI build-out. "AI is changing how semiconductor designs are created, but generating a design is not the same as proving that it is correct," said Tewari, the company's CEO. Endiya's Medha Kannapally framed the investment the same way: "AI is accelerating chip creation, but correctness is becoming the bottleneck."
Around it, the day's other Indian rounds were small and mostly not AI: TRUE ARTIS, a Delhi NCR aesthetic surgery platform founded in 2025 by Ankit Joshi and Sandeep Upadhyay, raised ₹11.4 crore led by Zeropearl VC; DheyaTech took ₹43 crore in a pre-Series A led by Avaana Capital; Factrika raised ₹8.9 crore led by Info Edge; Kiddo raised ₹12.5 crore from Campus Fund. That distribution — one nine-figure AI fund, one AI seed round, and a tail of sub-$5 million non-AI cheques — is the 2026 market in miniature.
Analysis: two concentrations, compounding
PitchBook's first-half data puts US venture deal value at a record $412.7 billion, with AI companies capturing $355.9 billion of it — 86 cents of every dollar. Roughly 87.5% of deployed capital went into financings of $100 million or more. Fewer companies, much larger cheques.
The second squeeze is the one emerging managers actually feel. The five largest venture managers captured 73.1% of all capital raised in the period; the top 15 took 88.5%. Funds above $1 billion accounted for 71.9% of US dollars raised through May, up from 34.2% a year earlier. In full-year 2025, 177 emerging-manager vehicles closed against 199 established ones — the lowest emerging count since 2015 — and the median time to close a fund has stretched to about 15 months.
"If you're raising a fund outside the top 15 right now, your real competition isn't other emerging managers," wrote Trace Cohen, founder of New York Venture Partners, in a July analysis of the PitchBook figures. It is the LP's temptation to write a larger cheque to a brand it already knows.
Read against that backdrop, Activate's LP list looks less like a vanity roster and more like the actual product. A first-time manager without an institutional anchor is, functionally, locked out. Activate substituted a different kind of anchor: operators and AI researchers who write smaller cheques but supply the sourcing edge and technical credibility LPs now demand in place of a track record. Its India focus helps too — AI startups there raised $676 million across 57 deals in H1 2026, more than 4x year-on-year, from a base low enough that a $105 million fund is meaningful rather than marginal.
What to watch
Three things. Whether Activate's seven stealth companies surface with Tier 1 follow-on rounds, the fastest proxy for whether "inception investing" sources anything the larger funds missed. Whether the H2 2026 data shows any softening in the 86% AI concentration ratio, or whether it hardens. And whether India's AI fund cohort — Accel's $550 million vehicle, Elevation's $500 million Fund IX, Fundamentum's frontier vehicles, now Activate — ends up competing for the same two dozen companies. Nine months of deployment is not a track record. Fund II is where the thesis gets priced.
“generating a design is not the same as proving that it is correct”— Madhulima Tewari, CEO, VerifAIX