MUMBAI/BENGALURU, Sept. 1 -- When Wellbeing Nutrition sought funding, it had options-but it chose Fireside Ventures, a fund with deep consumer expertise. Across India, startups are increasingly making the same calculation, pushing generalist venture capital (VC) funds to hire sector specialists and reinvent themselves.

Once defined by broad bets, generalist funds are now hiring industry specialists to stand out in a market where capital alone no longer suffices. According to industry experts, these hires are reshaping how deals are sourced and companies are built.

Sector experts help with due diligence, advise on growth plans-both organic and inorganic-and guide founders on when to cash out. The shift reflects intensifying competition f...