Fundamentum Partnership, a enterprise agency co-founded by Nandan Nilekani and Sanjeev Aggarwal, has raised $227 million for its second fund because the high-profile tech business veterans double down on backing startups within the South Asian nation.
The fund plans to deploy the capital by investing in 4 to 5 startups annually. Fundamentum, which generally backs startups within the Sequence B stage and past, will look to steer or co-lead $25 million to $40 million rounds, Aggarwal informed DailyTech in an interview.
Nilekani, co-founder of IT providers large Infosys and who has been instrumental in improvement and evangelising of a number of of India’s digital initiatives together with biometric IDs Aadhaar, and Aggarwal, who based now IBM-owned BPO agency Daksh, launched Fundamentum in 2019 to again consumer-focused and software-focused startups.
“Digital acceleration, introduced on by the pandemic, has dramatically elevated expertise spending the world over. India has all of the elements in place—capital, entrepreneurs, tales of success, and liquidity. On this decade, we are going to see entrepreneurs making a fabric affect on the nation at scale because the digital depth of society will increase,” mentioned Nilekani in an announcement.
“We’re within the early phases of that journey. At Fundamentum, we examined the waters with the primary fund. We now intend to go deeper into our funding program, give attention to entrepreneurs creating built-to-last corporations out of India, and steadfastly assist them of their thrilling journey.”
The agency, which has evaluated over 500 startups, has made half a dozen investments to this point and its portfolio startups have collectively raised over $1 billion in observe on rounds, it mentioned. Fundamentum’s portfolio consists of unicorns on-line pharmacy Pharmeasy and automotive market Spinny.
Fundamentum’s new fund is backed almost solely by Indian entrepreneurs, it mentioned. “We really feel the entrepreneurs’ capital is superior capital. It delivers cash++,” Aggarwal mentioned.
“Provided that all of us entrepreneurs, we do have that bias,” he added, with out ruling out the likelihood that Fundamentum might open up the fund to institutional traders sooner or later.
The world’s second largest web market has seen the emergence of a number of native enterprise funds and likewise attracted scores of high-profile traders previously 12 years. Sequoia, Accel and Lightspeed, all of which have additionally been investing within the South Asian marketplace for over 10 years, introduced new funds lately.
SoftBank, Alpha Wave International and Tiger International have additionally elevated the tempo of their investments in India lately. SoftBank invested over $3 billion in India final yr alone. Tiger International has invested $6.5 billion within the nation thus far, DailyTech reported earlier.
Fundamentum’s new fund comes at a time when startups in India — and past — are discovering it more and more troublesome to boost capital at phrases thought-about favorable from final yr’s bull cycle norm. Aggarwal mentioned many reputed early-stage enterprise corporations have closed new rounds in India in current quarters, so there’s sufficient dry powder to proceed to again younger startups.
For development stage startups, it’s a barely totally different story. “The expansion capital that used to come back to India, that has kind of dried up,” he mentioned. Aggarwal acknowledged the shift within the dynamics within the business, saying valuation asks have corrected and dealflow has remained robust. “So that you now have time to do extra due diligence and make investments at proper costs,” he mentioned.