Nandan Nilekani’s Fundamentum raises $227 mn for second fund

• ByStartupStory     |    August 19, 2022

Fundamentum Partnership, co-founded by Nandan Nilekani, co-founder and chairman of Infosys and one of India’s most recognized entrepreneurs, has secured $227 million in its second fund for investing in early development stage Indian firms, the company announced on August 19. According to the company, Fundamentum will invest in businesses that have achieved product-market fit and gained momentum in their scale-up path. According to Fundamentum, the mid-stage venture capital, as well as an accelerator, would lead, co-lead rounds of $25-40 million and invest in four to five firms per year.

Fundamentum will focus on tech-driven firms in the consumer internet & enterprise software space in India and will back entrepreneurs operating outside of the country through the fund, according to the company. “The pandemic’s digital acceleration has drastically raised technology investment around the world.” India has all of the ingredients: capital, entrepreneurs, success stories, and liquidity. As the digital intensity of society increases, we will see entrepreneurs making a meaningful influence on the country at scale in this decade,” stated Nilekani, co-founder & General Partner, of Fundamentum Partnership.

Fundamentum, founded in 2017 by Nilekani & Sanjeev Aggarwal, had created its first $100 million fund, which was carefully allocated to early development stage firms. Pharmeasy and Spinny are among the unicorns in the company’s portfolio. Unicorns are companies valued at more than $1 billion. Fundamentum said that since its initial investment, its portfolio firms have raised more than $1 billion in follow-on funding. “The second fund has been massively oversubscribed.” “We intend to follow the same strategy as in Fund I, which was to invest in tech-driven firms from India,” stated Aggarwal, Co-founder & General Partner.

Fundamentum joins a growing list of Indian early-stage venture capital investors who have secured significant money for Indian-focused firms. Accel and Elevation Capital both closed their largest-ever India-focused funds earlier this year. Elevation Capital, which has funded Swiggy, Meesho, Paytm, and Unacademy, had a $670 million fund for Indian businesses. In the meantime, Accel raised $650 million in a fund targeted at Indian businesses in March. The substantial sums raised have allayed fears of a funding freeze in India’s startup sector.

VC firms have witnessed the valuations of their Indian tech portfolio companies expand dramatically over the previous decade, owing to the acceleration of digital adoption & rising consumer incomes, as Nilekani stated. Matrix Partners India, another early and growth stage investor, has informed the US Securities and Exchange Commission that it intends to raise $450 million in its fourth India-focused fund. Fireside Ventures, another local early-stage VC fund that has supported startups like Mamaearth, is trying to raise $200 million in its second fund, according to sources.

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