Nandan Nilekani leaves GP role at Fundamentum as it launches $200M third fund

Nandan Nilekani, the co-founder of Infosys, has announced he will step down from his position as a general partner at Fundamentum Partnership, the venture capital firm he established nearly ten years ago. This transition comes as the firm prepares to launch its third fund, which aims to raise approximately $200 million. Despite this change, Nilekani will remain the fund’s anchor investor and will continue to provide mentorship and advice to the firm and its portfolio companies, as confirmed by his co-founder, Sanjeev Aggarwal. Aggarwal characterized this shift in Nilekani's role as merely a change in title, emphasizing that he will still be deeply involved in mentoring the startups backed by Fundamentum. "He is an integral part of our firm. The one thing that he enjoys the most is mentoring the teams that we back, and he will continue to do so in Fund III," Aggarwal stated. At 71, Nilekani is recognized as one of India’s prominent technology figures. In addition to founding Infosys, he played a crucial role in creating Aadhaar, the biometric identification system of India, and has been a strong proponent of the country's digital public infrastructure, including the Unified Payments Interface (UPI). He is also a supporter of the Open Network for Digital Commerce (ONDC), designed to enhance the openness and interoperability of e-commerce in India. Fundamentum, co-founded by Nilekani and Aggarwal in 2017, focuses on investing in Indian startups at the Series B stage and beyond. Its portfolio includes notable companies such as Spinny, PharmEasy, Kuku FM, and AppsForBharat. With the launch of the new fund, the senior investment team at Fundamentum is expanding. Alongside Aggarwal, the leadership for Fund III will include Prateek Jain, a founding member, fintech expert Mayank Kachhwaha, and finance chief Sanjay Chaturvedi. The third fund is set to support eight to ten early-stage startups in sectors such as consumer technology, fintech, and AI, with initial investments projected to be around ₹100 crore (approximately $10.5 million) each. Although the firm has not yet completed its first closing, it has already started deploying capital, with expectations to finalize fundraising within 12 to 18 months. Aggarwal revealed that Nilekani is making his largest-ever commitment to a venture capital fund with this new initiative but refrained from disclosing the exact amount. The fund is anticipated to source roughly half of its target from international investors, with the remaining capital coming from Indian institutions, family offices, and other partners. This reflects the significant evolution of India’s venture capital landscape over the past decade, where domestic investors are now playing a more substantial role. Aggarwal pointed out that the most significant AI opportunities in India lie in applications leveraging existing global models, particularly in financial services and vernacular consumer applications. This perspective highlights India's focus on application-layer startups rather than developing foundational AI models, contrasting with trends seen in the U.S. and China. This leadership change follows the exit of general partner Ashish Kumar, who has launched a separate AI-focused venture fund, Fundamentum Frontier Advisors (F2A), where Nilekani also serves as an anchor investor. Aggarwal clarified that F2A operates independently of Fundamentum and that Kumar is not involved in the new Fund III. To date, Fundamentum has made 17 investments across its first two funds, with Aggarwal noting that they have successfully returned about half of the capital from the first fund to their investors, while the second fund is now concentrating on follow-on investments.