Bengaluru-based Fundamental VC, founded by startup executives, has launched its maiden fund with a target corpus of $130 million (around Rs 1,000 crore) to invest in early-stage startups.
The sector-agnostic fund will actively evaluate ventures across spaces such as consumer internet, healthcare, insurance, financial services, SaaS (software-as-a-service), gaming, and AI, among others, the company announced in a statement.
The fund received approval from the markets regulator Securities and Exchange Board of India (Sebi) in March this year and has already started deploying capital with plans to lead investments in pre-seed and seed rounds.
With an average ticket size of $1.5 million per startup, Fundamental VC aims to support 30 companies through the fund over a period of two years.
“Fundamental’s maiden fund is backed by an equal mix of domestic and international Limited Partners (LPs) from geographies such as Singapore, West Asia and the US. The mix comprises a host of unicorn founders, high networh individuals (HNIs), family offices and senior technology executives, who have been long associated with the early-stage startup ecosystem as operators, digital-first entrepreneurs, domain experts, and enablers who could facilitate cross-border expansion in terms of business growth and capital,” the statement added.
Fundamental VC was founded by former startup operators and angel investors Saswat Sundar and Abhishek Rathi, who have previously worked as a duo together at early-stage startup-fundraising platform LetsVenture.
“Our focus on early-stage startups is due to our ability to understand the pulse of the ecosystem and build companies from the ground-up and scale them globally. Whether it is networking to strengthen the proposition, building a high-quality team or finding solutions to daily teething issues, we understand the hassles of starting up and intend to work collaboratively with founders,” said Saswat Sundar, co-founder, Fundamental VC.
He added, “We will invest in a limited set of businesses with sound fundamentals instead of a spray-and-pray approach. As a part of our portfolio growth strategy, we have created a ‘ready-to-scale’ stack to help our portfolio companies achieve PMF (product-market fit) and scale.
Sundar has worked with startups including Oyo and Stashfin with his recent stint being a senior executive at revenue-based financing platform Velocity. Prior to Velocity, he headed the Startup Sourcing and Evaluation division at LetsVenture.
Meanwhile, co-founder Rathi has been a former banker who worked with the likes of Citi, HSBC and Union Bank of India and later headed the deals and partnerships segment for LetsVenture. He has been an angel investor since December 2019.
“We have realized that there is a strong need for an approachable institutional capital support for early-stage founders. Our vision is to fill this gap by being the most reliable, approachable, founder-centric and smart institutional capital support from day zero. Fundraising has always been a full-time activity for entrepreneurs. 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,” Rathi said.
Fundamental VC has exclusive partnerships with several industry stalwarts to facilitate better GTM (go-to-market), user acquisition, product distribution, hiring and growth strategy for its portfolio startups.
Both Sundar and Rathi have so far invested in their individual capacity in 20+ ventures including Agnikul, Kenko, TradeX, BluSmart, Stockgro, Dukaan, eloelo, and Redcliffe Lifesciences.
Other VCs in the space
Fundamental VC joins the league of several such new funds entering India's early-stage investment space. Recently, VCCircle reported about Roots Ventures’ plans to raise a $100 million fund, while Singapore-based venture capital firm DSG Consumer Partners is planning to raise its fourth consumer-focused fund.
Earlier this year, Chennai-based Anicut Capital was reported to launch its venture fund that has a target corpus of $67 million.
Smaller players such as All In Capital – founded by former upGrad executive Kushal Bhagia, Disruptors Capital and India-focused Riverwalk Holdings backed by Thakral Group also launched $10 million, $15 million and $19 million funds, respectively.
Recent report by InnoVen Capital said that India’s early-stage funding had surged 63% in calendar year 2021, with investors pouring $594 million in startups at seed and pre-Series A rounds across 316 deals.
