Nilekani, VC Aggarwal float $100-mn tech fund to back mid-stage startups

 

Infosys co-founder Nandan Nilekani and venture capitalist Sanjeev Aggarwal have launched a $100-million venture fund to back mid-stage start-ups that solve unique Indian problems in the consumer technology space.

While Nilekani is looking to back companies that target India’s domestic economy, he also senses opportunities in backing enterprise technology firms and outsourcing companies that serve global corporations — a model Infosys helped pioneer to become India’s second-largest software exporter.

The venture, which has been dubbed “The Fundamentum Partnership”, will look to lead investment rounds of $10 million to $25 million. It will have an initial corpus of $100 million and will be extended to $200 million if opportunities come along.

Until now, Nilekani has only been an angel investor in start-ups such as ShopX, RailYatri, Sedemac and Power2SME, pumping in small tokens of his personal wealth and mentoring founders. With Fundamentum, Nilekani will institutionalise his investments through a venture capital firm.

“I have thoroughly enjoyed looking at how Indian entrepreneurs identify original Indian problems and then solve them with application of technology. India continues to be blessed with phenomenal entrepreneurial talent and the attempt with this platform will be to see how we can amplify their success,” Nilekani said.

Fundamentum will not only attract personal investments from Nilekani and Aggarwal, who is a co-founder of Helion Ventures, but capital will also be contributed by a set of institutional investors.

Both the founders will, however, not charge any management fee or carried interest for running the fund.

“While India has earned recognition as a start-up nation, it is as yet an unproven scale up nation. Ten years ago, with Helion, the attempt was to participate in creating a ‘start-up’ ecosystem in India and now, with Fundamentum, we want to help build a much needed ‘scale up’ ecosystem in the country,” said Aggarwal.

Nilekani joins other Infosys founders such as N S Raghavan, N R Narayana Murthy, Kris Gopalakrishnan and S D Shibulal to set up venture funds that backs start-ups and entrepreneurs in the country. Raghavan, a co-founder of Infosys who retired as deputy managing director in 2000, had set up Ojhas Ventures that has backed several tech and health care start-ups in India.

Murthy had set up Catamaran Ventures, which has backed firms such as Paper Boat and CloudTail, a joint venture with Amazon for the Indian market. Gopalakrishnan and Shibulal formed Axilor Ventures that incubates start-ups as well as backs those doing research in core technology and science.