Nandan Nilekani’s venture firm, Fundamentum Partnership, is targeting a corpus of Rs 1,800 crore to Rs 2,500 crore for its third fund. The firm intends to invest in consumer internet and fintech startups that have moved past the initial survival phase. This move highlights a focus on growth-stage funding, a segment where businesses need capital to scale efficiently in a more disciplined market environment.
What Happened
Fundamentum Partnership, the venture capital firm co-founded by Infosys co-founder Nandan Nilekani and former Helion Venture Partners executive Sanjeev Aggarwal, is preparing to raise its third fund. According to preliminary reports, the firm is aiming for a target corpus between Rs 1,800 crore and Rs 2,500 crore. The firm is currently moving through the necessary planning and regulatory approval processes to launch this new investment vehicle.
The Focus on Growth-Stage Funding
Unlike early-stage investors that support startups at the concept or prototype phase, Fundamentum typically enters at the Series B stage. This is a critical time for startups. At this level, companies have usually proven that customers want their product, but they require significant capital to scale operations, expand to new cities, or improve their technology. By focusing on this specific phase, the firm aims to support companies that are transitioning from small businesses to large, scalable enterprises. The strategy remains consistent with its past funds, focusing on the consumer internet and fintech sectors.
Tracking Past Performance
Fundamentum has a history of backing notable Indian startups, including PharmEasy and Spinny. These companies reached unicorn status—a term for private startups valued at over $1 billion—after receiving backing from earlier funds. However, the journey for growth-stage companies in India has been complex. Sectors like consumer internet and fintech often face high customer acquisition costs and intense competition. Additionally, the fintech space is subject to strict and evolving regulations from the Reserve Bank of India (RBI), which can impact business models and profitability. Investors often monitor how these companies balance rapid growth with the pressure to demonstrate sustainable profits.
The Shift in Market Reality
When Fundamentum launched its first fund in 2017, the investment environment was focused heavily on aggressive user growth. Today, the reality for venture capital is different. Following the global and local market corrections of the last few years, the focus has shifted toward unit economics—a way of measuring whether a product makes a profit on each unit sold. For a fund looking to deploy capital in 2026, the success of the portfolio companies will depend on their ability to show a clear path to profitability rather than relying solely on burning cash to gain market share. Startups in the consumer and fintech space now face higher hurdles to secure late-stage funding, making the role of growth-stage investors like Fundamentum more important.
What Investors Should Track
For those watching the startup ecosystem, the key monitorable for Fund III will be the actual deployment of funds and the quality of the startups selected. As the fund starts investing, observers will look for signs of operational discipline in the portfolio companies. Success for this fund will ultimately be measured by its ability to secure exits, such as through initial public offerings (IPOs) or acquisitions, which provide returns to the investors who backed the fund. Future updates on anchor partners and the final closure of the fund will provide more clarity on its scale and ambition.