Why Nandan Nilekani says India’s real challenge now is building institutions, not startups

Growth-stage investment firm Fundamentum Partnership has launched its third fund with a target corpus of Rs 2,200 crore, including a Rs 400 crore greenshoe option, with Infosys co-founder Nandan Nilekani anchoring it as the fund’s largest limited partner commitment to date.

In a statement, Nilekani said India’s challenge is no longer a shortage of entrepreneurial ambition, but building institutions that can endure and create value over decades — a philosophy reflected in Fund III’s structure, which hands greater leadership responsibility to a new generation of partners even as Nilekani and co-founder Sanjeev Aggarwal remain closely involved.

Fundamentum was founded in 2017 to focus on Series B investments in Indian technology companies, a stage where startups have moved beyond early product-market fit but require larger capital pools to scale. Aggarwal, who earlier co-founded Helion Venture Partners and backed companies including MakeMyTrip, RedBus, BigBasket, Spinny and PharmEasy, said the firm was built to help entrepreneurs navigate the scale-up journey beyond simply providing capital.

The fund will write cheques of Rs 100 crore to Rs 150 crore for 10-15% stakes, targeting eight to 10 investments largely in consumer technology, fintech, and AI-native or AI-enabled businesses. Fundamentum’s first fund in 2017 raised $90 million, while its second, launched in 2022, exceeded $200 million and delivered a gross internal rate of return of 26%, with portfolio companies growing 123% over the past year.

Fund III will be led by Aggarwal, Prateek Jain, Mayank Kachhwaha and Sanjay Chaturvedi as general partners, with Jain and Chaturvedi part of the firm since its founding and Kachhwaha having joined during Fund II to build its fintech investing practice — a leadership bench Kachhwaha said Nilekani and Aggarwal have deliberately grown over time.