Nandan Nilekani's Fundamentum Sharpens Fintech Focus Amid India's Digital Boom
Infosys co-founder Nandan Nilekani's venture capital firm, Fundamentum, is preparing to significantly increase its fintech investments through its upcoming third fund. The firm is banking on India's robust digital public infrastructure and the persistent financial inclusion gap to drive the next wave of growth in the sector.
Strategic Shift Towards Fintech
According to Mayank Kachhwaha, who leads fintech investments at Fundamentum, the Indian ecosystem is now fully primed for expansion. "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," Kachhwaha stated in an interview. This strategic pivot comes at a time when major Indian fintech players like Pine Labs and Groww have already gone public, with several others, including Razorpay and PhonePe, expected to launch initial public offerings this year.
Recent Investments and Portfolio Strategy
Fundamentum has been actively building its fintech portfolio. The firm recently led a $23 million Series C funding round in Olyv, a personal loan provider platform. This marks Fundamentum's fourth fintech investment, bringing such bets to nearly half of the 11 total investments made through its second fund, which has a corpus of $227 million. Other notable investments include:
- Participation in Flexiloans' $44 million Series C in June 2024
- Leading wealthtech startup Stable Money's $20 million Series B in June 2025
- Participation in TransBnk's $25 million Series B in August 2024, led by Bessemer Venture Partners
The firm typically provides growth capital, writing initial cheques between $10-15 million in rounds it leads, followed by larger follow-on investments. "We like to come in post-product-market fit, where these companies are transitioning and actually trying to build institutions," explained Kachhwaha.
Targeting Key Fintech Segments
While Fundamentum hasn't set a specific target for the number of fintech companies in its third fund portfolio, the firm is focusing on tech-first companies building with India as their primary market. Within fintech, Fundamentum is broadly looking to back companies across four key segments:
- Micro, small- and medium-sized enterprise (MSME) credit
- Consumer credit
- Wealthtech
- Banking infrastructure
The Massive MSME Credit Opportunity
The MSME credit space represents a particularly significant opportunity. According to a report from the Small Industries Development Bank of India, there's an addressable credit gap of approximately ₹30 trillion (roughly $300 billion). Business registrations in the sector surged from 2.5 crore in March 2024 to over 6.2 crore in March 2025, indicating a growing need for credit access.
Digital lending for MSMEs has been flagged as a 'large emerging opportunity,' especially since 90% of survey respondents were already 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," noted Kachhwaha. "We're also seeing companies now moving up from serving the first 100 million customers to chasing the next 400 million users."
Wealthtech and Insurance Tech Prospects
In the wealthtech sector, Fundamentum sees scope to develop India-specific savings products as financialization deepens. Systematic investment plan inflows have skyrocketed in recent years, with average monthly SIP flows increasing nearly 2.75 times since FY22 and 7.79 times 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 explained regarding wealthtech opportunities.
The firm is also considering insurance tech, though it acknowledges that the infrastructure layer is still being developed, comparing it to where India's payments ecosystem was back in 2015.
Selective Investment Approach
Like most venture capital firms and family offices, Fundamentum maintains a highly selective investment strategy, evaluating between 5 to 10 companies every week. However, the firm often builds relationships with potential portfolio companies for years before making formal investment decisions.
"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, highlighting the firm's long-term engagement approach with promising startups.
As India's fintech ecosystem continues to mature, Fundamentum's increased focus on the sector reflects growing confidence in the country's digital transformation and the vast opportunities that remain untapped in financial inclusion and innovation.
