Nexus Venture Partners closes $700 million eighth fund to double down on early-stage AI, consumer and fintech bets

Nexus Venture Partners has closed a new $700 million fund at a time when global venture capital deployment is gradually recovering and early-stage AI startups continue to attract investor interest The VC firm said the new capital will focus on founders building artificial intelligence, enterprise software, consumer and fintech companies across India and the US.

Over the past few weeks, there has been a significant increase in dry powder. Fireside Ventures, Activate.AI, Sauce VC and several other funds have all raised fresh capital to primarily back consumer and AI startups.

Industry estimates suggest that venture funds already have $12–15 billion waiting to be deployed in India, the world’s third-largest startup ecosystem.

“The last few years have been surreal for the technology world with trailblazing breakthroughs in generative AI and an unprecedented pace of AI adoption across consumers and businesses alike,” Nexus Venture Partners said in a media statement on December 4.

From infrastructure to applications, every layer of the tech stack is getting rewritten by AI, the VC said added.

Moneycontrol was the first to report in July that Nexus was preparing to raise a $700 million fund. Nexus, like several other VC funds, has decided to keep its fund size unchanged from last time, a strategy that has taken centre stage as investors face pressure to show returns.

Nexus, founded in 2006, manages $3.2 billion across funds and has invested in more than 130 companies with over 30 exits.

Nexus had first raised $100 million in 2007 and eventually increased the total fund size to $485 million in its sixth fund in 2021. Two years later, in 2023, it raised $700 million in its seventh fund and is set to repeat that exercise this year.

Apart from fundraises every two years on average, Nexus has also made money by diluting stake and selling shares in Olx, Proptiger, Sedemac, Unicommerce, WhiteHat Jr and several others.

Its portfolio includes Postman, Zepto, MinIO, Turtlemint, Delhivery, India Shelter, Rapido, and several US-based AI startups. The firm operates with teams across India and the Bay Area.

Nexus had first raised $100 million in 2007 and eventually increased the total fund size to $485 million in its sixth fund in 2021. Two years later, in 2023, it raised $700 million in its seventh fund and is set to repeat that exercise this year.

“With Fund VIII, we’re doubling down on visionary entrepreneurs solving the hardest problems and shaping the next wave of global innovation,” they added.

The new fund will deploy capital at inception, seed and Series A stages, backed by limited partners who have largely been associated with Nexus since its early years.

Nexus Venture Partners, Accel, A91 Partners, Fireside Ventures and several other VC firms are on a fundraising spree after a break of over a year.

Since the beginning of the year, apart from A91’s $665 million fund and Accel’s $650 million fund, Silicon Valley-based Bessemer Venture Partners also launched its second India-focused fund with a corpus of $350 million.

Similarly, other domestic early-stage investment firms like Cornerstone VC and Prime Venture Partners have also raised large funds, at $200 million and $100 million, respectively.