Fundamentum Partnership, floated by Infosys co-founder Nandan Nilekani and Helion Ventures co-founder Sanjeev Aggarwal, has raised $227 million for its second early-growth stage fund, the firm announced on Friday.
The fund will be backing 4-5 startups each year, it plans to lead or co-lead $25-40 million rounds.
“The second fund is oversubscribed. We plan to continue the same strategy as used in Fund I – investing in tech-driven enterprises from India. Entrepreneur quality is the single biggest determinant in the success of a company,” said Sanjeev Aggarwal, co-founder and general partner of Fundamentum Partnership.
He added, “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.”
The second fund was primarily raised from entrepreneurs in the ecosystem, 25% of the capital is raised internally while the rest comes from entrepreneurs, Aggarwal said without divulging further detail.
Fundamentum’s first fund was deployed strategically in early growth stage startups, 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, it said.
Ashish Kumar, partner, Fundamentum said the fund is launching at the right juncture as the ecosystem needs a fund which operates in Series B/C stages. He added, that last year due to excessive funding, SaaS startups' valuations were overvalued with revenue multiples of up to 30 times which Kumar says has seen correction in recent months.
Kumar adds that currently SaaS startups are valued at 10-12 times revenue multiples.
“There are two key advantages that Fundamentum brings. First, it is an ‘Entrepreneur Venture’, with an experienced team of former entrepreneurs. We can leverage our own experience to contribute to the early-growth stage companies that we are investing in. Second, this stage is still very 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 a year with an aim to invest in 4-5 start-ups every year,” Kumar added.
The firm will also focus on cleantech investments with this fund, Prateek Jain, Principle at Fundamentum said India is seeing many cleantech companies coming, but not many are in the Series B/C stage as many are at a conceptual level. “In the next 12 to 18 months a good set of companies will come but as of now we are in the early days of meeting these companies, mapping them out and seeing what are the areas that we can look at.”
Founded in 2020 by Nilekani and Aggarwal, The Fundamentum Partnership has investments in companies like PharmEasy, online travel portal Travel Triangle, and used-car retailing platform Spinny, global SaaS platform provider FarEye and online trading platform Probo.