Even as Venture Capital (VC) firms sharpen their focus on India’s deep-tech opportunity, growth-stage investor The Fundamentum Partnership is taking a more measured view.
Announcing the launch of its third fund with a target corpus of Rs 2,200 crore, including a Rs 400 crore greenshoe option, Sanjeev Aggarwal, Co-founder and General Partner at Fundamentum, said the firm is yet to conclude whether deep-tech startups have reached a stage where Series B investors can back them with conviction.
“We are still not clear whether the Series B moment for deep tech has arrived or not,” Aggarwal told Business Today. “AI is fairly clear because it is embedded in businesses. Deep tech is a different animal, and we will develop a clearer point of view over the course of this fund.”
Founded in 2017 by Nandan Nilekani and Aggarwal, Fundamentum is among the few India-focused funds dedicated to Series B investing. Its third fund will continue backing growth-stage startups across consumer technology, fintech, and AI-native and AI-enabled businesses, writing initial cheques of Rs 100-150 crore.
For Aggarwal, the challenge with deep tech lies less in the opportunity and more in evaluating it.
“We don’t think a typical fund like ours can evaluate the underlying technology,” he said. Instead, Fundamentum will rely on customer adoption as the strongest validation of whether a technology works. If enterprise or commercial adoption is robust, the firm believes it can add value by helping founders accelerate go-to-market execution and expand globally through its operating experience and network.
The cautious stance on deep tech stands in contrast to Fundamentum’s growing conviction around AI. The firm believes AI is no longer a standalone investment category but a horizontal capability reshaping industries ranging from financial services to education and commerce.
Prateek Jain, General Partner at Fundamentum, said the economics of AI are fundamentally changing the opportunity landscape. “The cost of intelligence has shrunk to near zero,” he said, arguing that AI is making services economically viable for millions of consumers who were previously expensive to serve.
Aggarwal expects AI to significantly widen access to digital services for India’s nearly 400 million mobile internet users. AI-powered wealth management, insurance advisory and personalised tutoring, he said, could make sophisticated services accessible beyond affluent urban consumers. “This 400 million (mobile users) will be touched by AI, especially in services,” he said.
Mayank Kacchwaha, General Partner at Fundamentum, added that AI-driven conversational interfaces and agentic commerce could also help extend digital commerce and financial services to the next 100 million users, particularly those more comfortable interacting through voice than text.
Fund III also marks the largest commitment by Nandan Nilekani to any venture capital firm, with the Infosys co-founder anchoring the fund. According to Aggarwal, Nilekani’s role extends well beyond capital. Entrepreneurs frequently approach him with ideas, making him an important source of proprietary deal flow. He also regularly mentors portfolio founders and provides feedback on prospective investments before the firm makes its final decisions.
Fundamentum launched its first $90-million fund in 2017, backing companies including Spinny and PharmEasy. Its second $200-million fund, raised in 2022, invested in 11 startups such as Kuku FM, Stable Money, TransBnk and Apna Mart, with five portfolio companies already raising follow-on rounds. With Fund III, the firm plans to maintain a concentrated portfolio of around 10 companies, while reserving capital to double down on its strongest performers.
For Fundamentum, the next phase of growth investing may well be driven by AI. Deep tech, however, will need to prove that it can consistently translate technological breakthroughs into commercial adoption before it becomes a core Series B bet.
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