Nexus Venture Partners, one of India’s top venture capital firms with a growing portfolio in the US, is in talks to raise $700 million (around Rs 6,000 crore) for its eighth fund, people familiar with the matter told Moneycontrol.
The new fund will match the size of Nexus’ seventh fund, raised in 2023, its largest since the firm was founded in 2007.
This move adds to the significant pool of capital available for Indian 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.
With its new fund, Nexus is expected to continue backing next-generation companies in artificial intelligence (AI), software, fintech, and commerce, in line with its recent investment strategy.
Nexus Venture Partners did not reply to Moneycontrol’s queries.
The VC firm, an early backer of Delhivery, Zepto, Unacademy, Postman, Snapdeal and several other startups, has raised a total of seven funds in 16 years, according to company data.
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.
Same fund size, less pressure
Nexus’s decision to keep the fund size unchanged from earlier is not a new strategy. Several large VC firms like Accel have stuck to their sweet spots and raised an amount similar to what they did a few years ago.
“It’s simple. More capital will mean more deployment pressure and more pressure to generate returns. Instead, you find a spot that works best for you and continue to invest on that basis,” a Partner at a large venture capital firm said.
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.
Meanwhile, other smaller VC firms like Sparrow Capital, Eximius Ventures and SamVed VC have managed to close smaller funds of $30-50 million since the start of this year.
However, the back-to-back fundraises will only add to the dry powder at a time when fundraising fell around 35 percent to just $2.7 billion in 2024, as abundant dry powder reserves among top investors curtailed overall activity, as per a recent report by Bain & Company and Indian Venture and Alternate Capital Association (IVCA). In comparison, VCs raised $4 billion in 2023 and a record $8 billion in 2022.
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