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Early-stage venture capital firm Fundamental launches maiden fund worth $130 million

The fund plans to lead investments in pre-seed and seed rounds with an aim to support 30 ventures over the next two years.

June 24, 2022 / 12:42 PM IST

Fundamental VC, an early-stage venture capital (VC) fund has launched its maiden fund with a target corpus of $130 million, at a time when early-stage funding is gaining traction among VCs in India.

The Bengaluru-based fund will be focused on sectors such as consumer internet, healthcare, insurance, financial services, software-as-a-service (SaaS), gaming, and artificial intelligence (AI), among others, the company said in a statement on June 24.

 Fundamental VC said it received Securities and Exchange Board of India’s (SEBI’s) approval in March. The VC claimed that it already has started deploying capital and plans to lead investments in pre-seed and seed rounds.

Founded by Saswat Sundar and Abhishek Rathi, former executives at startups like OYO, Stashfin, and Velocity, Fundamental VC said it plans to invest up to $1.5 million in each startup and aims to back 30 startups, over a period of two years.

Earlier, both founders have individually invested in startups and their portfolio companies include Agnikul, Kenko, TradeX, BluSmart, StockGro, Dukaan, Elo Elo, and Redcliffe Lifesciences.

“In order to focus on the sustainable growth and success of each startup in our portfolio, we have a highly curative investment strategy, wherein, we will invest in a limited set of businesses with sound fundamentals instead of a spray-and-pray approach,” said Sundar.

The fund also said it has partnerships with industry players to facilitate better go-to-market (GTM), user acquisition, hiring, and growth strategies, for its portfolio startups.

Rathi added, “We have realised that there is a strong need for an approachable institutional capital support for early-stage founders. Hence, as partners with a skin-in-the-game approach, we want to ensure that founders stay focused towards building what they enjoy the most, while we take on the responsibility of enabling capital support required to build their venture.”


Fundamental VC also said that it will look to invest in its portfolio startups at follow-on rounds. The VC said the maiden fund is backed by Limited Partners (LPs), which include unicorn founders, high networth individuals, and family offices, among others from geographies such as Singapore, Middle East, and the US, without disclosing further details.

Fundamental VC said it aims to offer a term sheet within a week's time and deploy capital within a period of one month from the closure of the deal. The VC said it sees an “excellent opportunity” to invest in startups at early stages amid the much-talked-about funding winter.

Fundamental VC’s fund launch comes at a time when early-stage funding in India is gaining traction, even as late-stage funding is slowing amid a global slowdown in financial markets. Large VC companies including Tiger Global and Sequoia Capital among others are investing heavily in startups at their early stages.

Earlier this week, Sequoia Capital India extended the seed funding ceiling for Surge, its startup accelerator programme, to $3 million in a bid to back more companies. The VC, which raised its largest-ever fund of $2.85 billion for India and Southeast Asia startups, also reportedly allocated $300 million for Surge.
Mansi Verma
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