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Fundamentum’s $227-mn second fund will back early growth-stage startups

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    Fundamentum Partnership, founded by Infosys co-founder Nandan Nilekani and Helion Ventures co-founder Sanjeev Aggarwal, has raised $227 million for its second fund, which will back early-growth-stage Indian startups, it said on Friday. The fund will either lead or co-lead rounds of $25-40 million, and invest in 4-5 startups every year.

    “The second fund is oversubscribed. We will continue the same strategy as Fund I—investing in tech-driven enterprises from India. Entrepreneur quality is single biggest determinant in the success of a company,” Aggarwal, general partner, Fundamntum Partnership, said.

    “A strengthened team and the 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,” he said.

    While entrepreneurs within the ecosystem contributed a majority to the fundraise, 25% of the capital was raised internally, Aggarwal said without divulging further details.

    Fundamentum’s $100-million first fund was deployed strategically in early-growth-stage startups, including unicorns such as Pharmeasy and Spinny.

    After the fund’s initial investment, Fundamentum’s portfolio companies have collectively raised over $1 billion in follow-on rounds, it said.

    Ashish Kumar, a partner at Fundamentum, said the fund is being launched at the right time as the ecosystem needs one that will back Series B-C stages. Due to excessive funding last year SaaS startups were overvalued with revenue multiples of up to 30 times, which are now valued at 10-12 times revenue multiples, he added.

    “There are two key advantages that Fundamentum brings. It is an ‘entrepreneur venture’, with an experienced team of former entrepreneurs. We can leverage our own experience to contribute to early-growth stage companies. Second, this stage is still very under-served in India and needs on-ground, homegrown investors for having fleet-footed approach and robust operational diligence. We are having a healthy pipeline and seeing over 200 deals a year with the aim to invest in 4-5 startups every year.”

    The fund will also focus on cleantech firms, Prateek Jain, a principle at Fundamentum, said. “India has many cleantech companies, but not many are in Series B-C stage. In the next 12 to 18 months a good set of companies will come. We are in the early days of meeting the companies, mapping them out and seeing what areas to look at,” Jain added.

    Founded in 2020, Fundamentum also counts the likes of online travel portal Travel Triangle, global SaaS platform provider FarEye and online trading platform Probo as its portfolio companies.

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