Fundamentum Partnership, the venture capital firm cofounded by entrepreneurs Nandan Nilekani and Ashish Kumar, has launched an investment platform, F2A (Fundamentum Frontier Advisors), with Rs 3,000 crore to invest in artificial intelligence (AI) and deeptech startups.
The fund will be led by Kumar, general partner at Fundamentum, who was earlier in talks to exit the firm and launch an independent investment venture.
F2A will be anchored by Nilekani and structured as an eight-year fund, with the initial years focussed on new investments and thereafter on follow-on capital in portfolio companies.
Of the corpus, Rs 2,000 crore is being raised through an alternative investment fund (AIF), and the rest through co-investments alongside other investors, limited partners (LPs), sovereign funds, family offices, and strategic backers, Kumar told ET.
Former SIDBI Venture Capital senior fund manager Debraj Banerjee has also joined the platform as general partner to co-lead its AI and deeptech strategy.
Kumar said F2A will invest across consumer, enterprise, and physical AI startups, with cheque sizes ranging between Rs 40-90 crore. Kumar’s portfolio at Fundamentum includes Pharmeasy, Spinny, AppsForBharat, and Fareye. The latest, Whizzo, a materials science startup, raised $15 million in a round led by the firm.
Fundamentum plans to back around 12-15 companies over the next three years. Kumar added that the fund’s LP base will include a mix of domestic and international investors, with more than half the capital expected to come from India.
Growth stage funding challenge
“We are seeing a structural shift in how AI and deeptech are being built and adopted across sectors,” Kumar said. “There are many investors willing to write $2-4 million cheques in AI and deeptech startups, but very few are ready to invest $10-15 million in companies at the growth stage.”
Kumar also pointed out that global investors are increasingly looking at India’s AI and deeptech ecosystem as the country builds “vertical infrastructure” and sector-specific AI businesses across industries.
Earlier, ET had written about how VCs are rushing to launch dedicated deeptech vehicles, looking to tap into the government’s Rs 1 lakh crore research, development and innovation (RDI) fund amid growing investor appetite for IP-led technologies.
Focus on commercialisation
Fundamentum, founded in 2017, has so far backed companies such as StableMoney, Olyv, AyuHealth Hospitals, Kuku FM, ApnaMar and others across its two funds. It last raised $227 million for its second fund in 2022. The firm has deployed 70% of the capital from its second fund.
Kumar said the firm will focus on companies at commercialisation stages rather than early research phases. “We will likely invest at TRL 6 or 7 and beyond. Companies need to either have revenues already or visibility of the same within the next 12-18 months,” he said. Technology readiness level (TRL) 6 or 7 is when most firms move from product development and are preparing to scale commercially through pilots or early customers.
The firm is looking at various sectors, including semiconductors, drones, robotics, quantum computing, energy transition, and spacetech, where Kumar believes India has a “right to win.” He added that the platform has already entered active deployment mode and expects to invest in four to five companies over the next nine months.
“We are not trying to cover every deeptech sector. We look at where India can build strategic advantages and where ecosystems are already emerging,” he explained.
Kumar noted that the rise of AI is reshaping venture investing, with AI driving revenue velocity while deeptech creates long-term defensibility. He added that future technology companies are unlikely to be “only software or only hardware”, and instead will increasingly combine both into physical AI, that has a moat.
The platform will also evaluate opportunities in what Kumar calls “sovereignty tech” — sectors where India seeks greater domestic capabilities and supply-chain independence.
“One part of our diligence process is evaluating how much of the supply chain can eventually be localised in India,” Kumar said. “If founders are not aligned with that long-term vision, we are unlikely to invest.”
Fundamentum’s launch comes amid rising investor interest in India’s AI and deeptech ecosystem, with multiple venture firms announcing specialised funds over the past year as sectors such as spacetech, defence tech, semiconductors, and robotics attract policy support and larger pools of capital.
