Fundamentum launches Rs 2,200 crore growth fund with Nandan Nilekani as anchor LP

Infosys cofounder Nandan Nilekani and Helion Ventures founder Sanjeev Aggarwal have launched Fundamentum III, their third growth-stage technology fund, with a target corpus of Rs 2,200 crore, including a Rs 400 crore greenshoe option, at a time when scale-up capital remains selective after the post-pandemic funding reset.

Nilekani will be anchoring the fund with what Fundamentum described as his largest investment in a venture capital firm. The vehicle will be led by Aggarwal, Prateek Jain, Mayank Kachhwaha, and Sanjay Chaturvedi as general partners.

According to people aware of the matter, Nilekani was a general partner (GP) in Fundamentum's first two vehicles, where his operational involvement was limited. With Fund III and the newly launched Fundamentum Frontier Advisors (F2A), Nilekani has transitioned to an anchor LP’s role. Sources said his involvement will largely remain unchanged, with him continuing to mentor the team and founders, as in the previous two funds.


Aggarwal said Fundamentum was set up to address a recurring “missing middle” in India’s startup market. “India has a very good startup ecosystem, but the wheels come off when companies try to scale,” he told ET, adding that the firm’s role was to provide both capital and operational support with organisation design, governance, hiring, and go-to-market strategies.

Fundamentum Fund III will back companies in consumer technology, fintech, and AI-native or AI-enabled businesses. It will typically write first cheques of about $10 million and invest $15 million on average across around 11 companies, with about 40% of the fund reserved for follow-on investments, the partners said.

The launch comes as several large rounds this year have been led by private equity, sovereign, and strategic investors, while pure-play domestic growth capital has remained limited.

Fund III also follows a leadership change at the firm after partner Ashish Kumar moved to head Fundamentum Frontier Advisors (F2A), a separate investment platform. F2A plans to invest Rs 3,000 crore in AI and deeptech startups, while Fundamentum remains focussed on its series B growth-stage strategy.

Asked about the move, Kachhwaha said the partners agreed that deeptech and AI opportunities were still early and did not fully align with Fundamentum’s mandate of entering after product-market fit. Chaturvedi said the firm wanted to double down on its existing growth-investment thesis and Kumar would be the right person to build an independent early-stage AI and deeptech vehicle.

Fundamentum has made 17 investments across its first two funds and counts Kuku, Spinny, PharmEasy, ApnaMart, AppsForBharat, FlexiLoans, Stable Money, TransBnk, Olyv, and ProcMart in its portfolio.

India is the bigger play

Aggarwal believes the bigger opportunity for Indian startups is to build products for the country first and then expand into similar emerging markets, rather than attempting to replicate the IT services model by selling directly to Western markets. “Regionalisation appears to be a more realistic opportunity than complete globalisation."

Meanwhile, Kachhwaha said Fundamentum views AI as an enabler across consumer technology and financial services. “These are markets that have always existed and will continue to exist. It (AI) helps us execute our thesis around serving the next 400 million consumers while also driving greater financial inclusion,” he said.

The partners cited use cases in financial services such as collections, underwriting, and land-record verification, where AI models can be built around local language, regulations, and workflow complexity.

Aggarwal added that India is well positioned to become “a hub for vertical small language models (SLMs) tailored to specific sectors and local contexts, instead of competing to build a single monolithic large language model.”

Fundamentum’s Fund II is clocking a gross IRR (internal rate of return), or the annualised return made on investments, of 26%, the firm said, with portfolio revenue having more than doubled over the past year.

Jain said growth investing requires a sharper assessment of whether a founder can move from iteration to focussed scale. “The keyword for early stage is iterate; the keyword for growth is focus, scale, and adjacency,” he said. On what pivots mean in today's AI world, he added that the core business should remain. "The focus to grow in that is what we are underwriting.”