Infosys co-founder Nandan Nilekani’s venture firm Fundamentum is preparing to sharpen its fintech bets in its upcoming third fund, banking on India’s digital public infrastructure and a widening financial inclusion gap to drive the next wave of growth, according to a top executive at the firm.
“India's digital public infrastructure is set up and ready, the ecosystem is ready, and the market is still completely wide open from a financial inclusion point of view,” Mayank Kachhwaha, who leads fintech investments at the VC firm, told Mint.
Fundamentum recently led a $23 million Series C round in Olyv, a personal loan provider platform. Nilekani's VC fund has previously participated in Flexiloans' $44 million Series C in June last year; it led wealthtech startup Stable Money's $20 million Series B, also in June 2025, and finally, participated in TransBnk's $25 million Series B from August last year, which was led by Bessemer Venture Partners.
Like most VC firms and family offices, Fundamentum is highly selective about the startups that it invests in, evaluating between 5 to 10 companies every week. That isn't to say its engagement with companies begins only when the firm wants to make an investment. “Some of these are relationships we've built for years before we say that yes, this is where we're going to come in, they're scaling rapidly and could use our help,” said Kachhwaha.
Fundamentum's decision to back more fintechs comes at a time when India has already seen major players like Pine Labs and Groww go public, with more expected this year. Heavyweights like Razorpay, PhonePe, InCred, Innoviti, Kissht, and PayU India are among those that are expected to make initial public offerings this year. While many of these are payments infrastructure and credit solutions companies, venture capital is now banking on a second wave of fintech startups, bringing new business models and financial products to Indian consumers.
The investment in Olyv marks Fundamentum's fourth fintech investment, bringing the VC firm's total to nearly half of the 11 investments it made through its second fund, which has a corpus of $227 million.
Typically, the firm provides growth capital, writing between $10-15 million as the first cheque in funding rounds that it leads, before writing larger follow-on cheques. “We like to come in post-product-market fit, where these companies are transitioning and actually trying to build institutions,” said Kachhwaha.
Areas of interest
At the moment, Fundamentum doesn't have a specific target for the number of fintech companies in its third fund portfolio. However, the firm's fintech interests are mainly in tech-first companies building with India as their primary market.
Being 'India-first' is at the core of Fundamentum's overall thesis. However, within fintech, the firm is broadly looking to back companies across four segments: micro, small- and medium-sized enterprise credit, consumer credit, wealthtech, and banking infrastructure.
The MSME credit space, for example, remains largely underserved despite the number of businesses in the sector growing. According to a report from the Small Industries Development Bank of India last year, there's an addressable credit gap of about ₹30 trillion (roughly $300 billion).
Registrations of businesses in the sector shot up from 2.5 crore in March 2024 to more than 6.2 crore in March last year, according to the report, indicating a greater need for access to credit. It also flagged that digital lending for MSMEs, an area of interest for Fundamentum, is a ‘large emerging opportunity,’ given that 90% of its survey respondents were accepting digital payments.
“As India's gross domestic product grows, so does GDP per capita, with which we will see more people come into the fold of credit inclusion,” said Kachhwaha. “We're also seeing companies now moving up from serving the first 100 million customers to chasing the next 400 million users.”
In wealthtech, the firm sees scope to build India-specific savings products as financialisation deepens. However, that too has been changing.
Low risk options
Over the last few years, inflows into systematic investment plans have skyrocketed. Average monthly SIP flows are up nearly 2.75X since FY22 and 7.79X since FY17, according to IIFL Capital. “Indians are still risk-averse, but are comfortable with fixed deposits. Using that, it's easy to give them a familiar product and start them on their wealth journey,” Kachhwaha said.
Another area the firm is considering is insurance tech, though it argued that the infrastructure layer is still being built, equating it to where India's payments ecosystem was back in 2015.