Fundamentum launches Rs 2,200 crore Fund III with Nandan Nilekani as anchor investor

Fundamentum launches Rs 2,200 crore Fund III with Nandan Nilekani as anchor investor

The Fundamentum Partnership has launched Fund III with a target corpus of Rs 2,200 crore, including a Rs 400 crore greenshoe option, as the growth-stage venture capital firm looks to expand its investments in Indian technology startups. Nandan Nilekani has anchored the fund as its limited partner, making his largest investment in any venture capital firm to date.

Moneycontrol first reported on June 22 that Fundamentum was preparing to launch its third fund to continue backing Series B and early growth-stage startups across sectors such as consumer internet, fintech and artificial intelligence.

Fund III will be managed by General Partners Sanjeev Aggarwal, Prateek Jain, Mayank Kachhwaha and Sanjay Chaturvedi, while Nandan Nilekani has come on board as the fund's anchor limited partner, making his largest investment in a venture capital firm.

Founded by Nandan Nilekani and Sanjeev Aggarwal in 2017, Fundamentum said it has become the only pure-play Series B investment firm in India to launch a third fund after its 2017 and 2022 vintages.

The new vehicle will continue to target startups that have achieved product-market fit and are preparing to scale, a segment the firm believes remains underserved in India's startup funding ecosystem.

Fund III will focus on consumer technology, fintech, and AI-native and AI-enabled businesses. The firm plans to invest Rs 100-150 crore in each portfolio company while maintaining a concentrated portfolio strategy.

It will continue taking board seats and work closely with founders on fundraising, leadership hiring, organisational design and expansion.

Sanjeev Aggarwal told Moneycontrol that Fundamentum will continue to stay away from foundational AI models and infrastructure and instead back startups building AI applications for Indian use cases.

He said the firm believes India's strength lies in becoming the "use-case capital" for AI, where companies combine domain expertise with artificial intelligence to solve sector-specific problems.

The investment team will continue the firm's operator-led approach by supporting founders on fundraising, leadership hiring, organisational design and expansion.

Prateek Jain told Moneycontrol that Fundamentum remains bullish on startups serving India's next 400 million internet users, with AI expected to make services such as wealth management, healthcare, education and content more accessible beyond metro cities.

"Companies targeting these users will need products and user experiences designed for their specific needs rather than adapting offerings built for urban consumers," he added.

Across its first two funds, Fundamentum has invested in 17 technology-led companies spanning consumer internet, fintech, enterprise technology, Bharat-focused applications and B2B commerce. Its portfolio includes Kuku, Spinny, PharmEasy, ApnaMart, AppsForBharat, FlexiLoans, Stable Money, TransBnk, Olyv and ProcMart.

The firm said it follows a concentrated investment strategy, typically backing four to five startups each year while taking board seats and partnering with founders through the scale-up journey.

Fund II currently has a gross internal rate of return (IRR) of 26%, while its portfolio companies recorded 123% growth over the past year, according to the firm.

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