India: Nandan Nilekani-backed Fundamentum raises $227m for its second fund

Nandan Nilekani. Photo: Ramesh Pathania/Mint

Fundamentum Partnership — a fund co-founded by Infosys co-founder Nandan Nilekani and Helion Ventures founder Sanjeev Aggarwal — has raised $227 million for its second vehicle, which is nearly 2.5 times larger than its first fund.

The firm aims to lead or co-lead $25-40 million Series B and C funding rounds in 4-5 tech-driven startups a year in the consumer internet and enterprise software segment.

“Series B and Series C are very underserved in India. All these global investors who came to India in the last 18 months have suddenly started writing smaller cheques and slowed down, because they have seen correction in their own portfolio,” Prateek Jain, Principal, Fundamentum Partnership told DealStreetAsia in an interview.

Around 25% of the amount raised by the fund came from the Fundamentum team and the rest has been invested by entrepreneurs and institutional investors, Jain said. The second fund is 30-40% oversubscribed, he added.

Jain, who is also a former entrepreneur, said the average age of a fund for Fundamnetum is around 2.5 years “The firm started with Nandan and Sanjeev and now we have 12 people and we are hiring more,” he said.

Recently, there has been a rise in investors foraying into small-ticket transactions. Most recently, Tiger Global led a $15 million funding round in fintech startup Jodo, its 12th early-stage bet in 2022, a threefold jump from last year, according to reports.

From its previous fund that Fundamentum launched in 2017, it funded Fareye, a logistics SaaS start-up; Ayu Health, a network of hospitals; Probo, a technology infrastructure company for events trading and two unicorns — health tech startup PharmEasy, and used-cars company Spinny.

Fundamentum’s new fund launch announcement comes at a time when global funds, including Sequoia, Accel, LightSpeed and Matrix Partners, have either raised new funds or are in talks to raise capital to tap tech investment opportunities in India.

“At Fundamentum, we tested the waters with the first fund. We now intend to go deeper into our investment programme, focus on entrepreneurs creating built-to-last companies out of India, and steadfastly support them in their exciting journey,” said Nilekani.

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