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Fundamentum Partnership, founded by Nandan Nilekani and Sanjeev Agarwal, has raised $227 million for its second fund.
The fund plans to invest in four to five startups each year and deploy capital. Fundamentum, which backs startups at the Series B level and beyond, is looking to lead or lead rounds of $25 million to $40 million, Aggarwal told TechCrunch in an interview.
Nilekani, who co-founded IT services firm Infosys and has been instrumental in evangelizing several Indian digital startups including Aadhaar, and Aggarwal, who founded the now IBM-owned BPO company Daksh, launched Fundamentum in 2019 to provide consumer support. – Focused and software oriented startups.
“The digital acceleration caused by the pandemic has dramatically increased technology spending worldwide. India has all the ingredients in place: capital, entrepreneurs, success stories and liquidity. In this decade, we will see entrepreneurs making a material impact on the country as the digital strength of society increases, Nilekani said in a statement.
“We are at the beginning of that journey. At Fundamentum, we tested the waters with our first fund. Now delving deeper into our investment program, we focus on entrepreneurs who are creating made-to-last companies from India and intend to support them in their exciting journey.
The firm, which has evaluated more than 500 startups, has made half a dozen investments so far and says its portfolio of startups has raised more than $1 billion in successive rounds. Fundamentum’s portfolio includes unicorn online pharmacy Pharmacy and auto marketplace Spiny.
Fundamtum’s new fund is almost entirely backed by Indian entrepreneurs, he said. “We feel that entrepreneurs’ capital is superior capital. It gives money++,” said Aggarwal.
“We all have that bias if we’re entrepreneurs,” he added, without elaborating on whether the fund could open its funds to institutional investors in the future.
The world’s second largest Internet market has seen the emergence of several local venture funds and has also attracted many high-profile investors over the past 12 years. Sequoia, Accel and Lightspeed, which have been investing in the South Asian market for more than 10 years, have recently announced new funds.
SoftBank, Alpha Wave Global and Tiger Global have increased the pace of investment in India in recent years. Softbank invested over $3 billion in India last year alone. Tiger Global has invested $6.5 billion in the country so far, TechCrunch previously reported.
Fundamentum’s new fund comes at a time when startups in India – and beyond – are finding it increasingly difficult to raise capital given the normalcy of last year’s bull cycle. Aggarwal said many well-known early-stage companies have closed new rounds in India in recent quarters, so there is enough dry powder to support young startups.
For advanced level beginners, it’s a slightly different story. “The growth capital coming into India has dried up,” he said. Aggarwal acknowledges the dynamic changes in the industry, valuation requests have been adjusted and deal flow remains strong. “So you have time to do more due diligence and invest at the right price,” he said.
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