Nexus isn’t going all-in on AI, keeping half of its new $700M fund for India startups

Nexus Venture Partners is taking a strategic approach with its latest $700 million fund, opting to divide its focus between artificial intelligence (AI) and startups in India. As venture capital increasingly flows into AI, Nexus is committed to supporting not only AI initiatives but also diverse sectors such as consumer goods, fintech, and digital infrastructure within the Indian market. The firm, which has been a player in venture capital for over 20 years, recognizes the significant shift AI represents in technology. However, it also understands the perils of investing heavily in a single, saturated category. With India’s digital economy expanding rapidly, Nexus sees a wealth of opportunities in AI adoption that extend beyond the confines of traditional tech. Headquartered in Delaware with offices in Menlo Park, Mumbai, and Bengaluru, Nexus operates as a unified fund with a collaborative U.S.-India team since its inception in 2006. The firm invests in early-stage software and India-focused companies from a shared capital pool. Its investments span a wide range from infrastructure and developer tools to AI startups, with a notable U.S. portfolio that includes companies like Postman and Apollo. Jishnu Bhattacharjee, a managing partner at Nexus, emphasized the pivotal role of AI in the current market landscape. He noted, “AI is a huge inflection point, and we are anchoring on that.” The firm recognizes that many AI innovations are increasingly being utilized to enhance services for the general public. With a total capital management of $3.2 billion and over 130 investments, Nexus has successfully executed more than 30 exits, including IPOs, highlighting its effective long-term strategy. The firm maintains a focus on early-stage investments, typically participating in inception, seed, and Series A rounds, starting with investments as modest as a few hundred thousand dollars. Despite retaining its fund size at $700 million since the launch of Fund VII in 2023, Nexus believes this amount is optimal for its early-stage investment philosophy. Bhattacharjee stated, “We don’t want to raise money for the sake of raising.” While India's AI sector may not yet match the U.S. in many aspects, Nexus sees potential for the country to innovate rapidly, fueled by a large talent pool and a growing digital infrastructure. The partners pointed to successful companies like Zepto and Neysa as case studies of how AI is being integrated into Indian businesses. Zepto, a quick-commerce platform, exemplifies the use of AI across its operations, while Neysa addresses unique local needs, including sovereign AI workloads and multilingual support. Although specific fund metrics were not disclosed, Nexus partners reported that their investment returns have been significant enough to sustain the fund largely through returning limited partners, whose base spans multiple regions, including the U.S., Europe, and Asia.