Nandan Nilekani's Fundamentum Partnership launches second fund, raises $227 million

Fundamentum Partnership has raised $227 million for its second fund. It will invest this in early growth stage Indian start-ups that can move from the start-up phase to the scale-up phase. It plans to fund enterprises that have attained product-market fit and have developed momentum in their scale-up journey. 

Continuing its approach of concentrated bets, the investment platform plans to lead or co-lead a $25-40 million round, investing in 4-5 start-ups each year. It will focus on tech-driven enterprises in India's consumer internet and enterprise software space. 

Fundamentum's first fund was deployed strategically in early growth stage start-ups, including Pharmeasy and Spinny, which have attained unicorn status. Post the fund's initial investment, Fundamentum's portfolio companies have collectively raised over $1 billion in follow-on rounds.

Speaking at the launch of the second fund, co-founder and general partner Nandan Nilekani said, "Digital acceleration, brought on by the pandemic, has dramatically increased technology spending across the world. India has all the ingredients in place—capital, entrepreneurs, stories of success, and liquidity. In this decade, we will see entrepreneurs making a material impact on the country at scale as the digital intensity of society increases. We are in the early stages of that journey." 

He further added that Fundamentum tested the waters with the first fund. It intends to go deeper into its investment program, focus on entrepreneurs creating built-to-last companies out of India, and steadfastly support them in their journey. 

Sanjeev Aggarwal, co-founder and general partner, added, "The second fund is significantly oversubscribed. We plan to continue the same strategy used in Fund I—investing in tech-driven enterprises from India. Entrepreneur quality is the single biggest determinant of the success of a company. We like to back missionary entrepreneurs with an unwavering focus on customer experience. A strengthened team and focus on emerging sectors such as Bharat apps, SaaS, and clean-tech, among others, will enable us to propel the growth of our investee firms."

Speaking on the learnings so far, Ashish Kumar, the co-founder and general partner, called Fundamentum an 'Entrepreneur Venture' with an experienced team of former entrepreneurs who can leverage their experience to contribute to the early-growth stage companies that we are investing in. This stage is still under-served in India and needs on-the-ground, homegrown investors for a fleet-footed approach and robust operational diligence. We have a healthy pipeline and are seeing over 200 deals yearly to invest in four to five start-ups."

Commenting on the fundraise, Prateek Jain, principal, said, "The fact that we were able to raise the fund in a short time, despite the tough market, shows that Fundamentum has a good standing with the investing community. About 25 per cent of the money comes from the Fundamentum Team, demonstrating firm belief and skin in the game."

Launched in 2017, Fundamentum focuses on early growth stage companies. It has operated on a model of 'Investment + Advice'. Beyond capital investment, the entrepreneurs-turned-investors have mentored companies and assisted them in their scale-up journey. 

In addition to Spinny and Pharmeasy, Fundamentum's other investments include logistics SaaS start-up FarEye, Ayu Health network of hospitals and Probo, a technology infrastructure company for events trading.