Synopsis
Fundamentum Partnership has launched F2A, a Rs 3,000 crore frontier-tech investment platform focused on AI and deeptech startups. The firm will invest between Rs 40-90 crore in 12-15 companies over three years, targeting commercialization-stage businesses in sectors like semiconductors and robotics where India has strategic advantages.Listen to this article in summarized format
Of this, Rs 2,000 crore is being raised through an alternative investment fund (AIF), while the remaining Rs 1,000 crore will be deployed through co-investments alongside other investors, limited partners (LPs), sovereign funds, family offices and strategic backers.
Former SIDBI Venture Capital senior fund manager Debraj Banerjee has also joined the platform as general partner to co-lead its AI and deeptech strategy.
Kumar told ET that F2A will invest across consumer AI, enterprise AI and physical AI startups, with cheque sizes ranging between Rs 40 crore and Rs 90 crore. The firm plans to back around 12-15 companies over the next three years. He added that the fund’s LP base will include a mix of domestic and international investors, with more than half of the capital expected to come from India.
“We are seeing a structural shift in how AI and deeptech are being built and adopted across sectors,” Kumar said. “There are many investors willing to write $2-4 million cheques in AI and deeptech startups, but very few who are ready to invest $10-15 million in companies at the early growth stage.” Kumar also pointed out that global investors are increasingly looking at India’s AI and deeptech ecosystem as the country builds “vertical infrastructure” and sector-specific AI businesses across industries.
Earlier ET wrote about how VCs are rushing to launch dedicated deeptech funds as investors look to tap into the government’s Rs 1 lakh crore research, development and innovation (RDI) fund and seeing growing investor appetite for IP-led technologies.
Fudamanetum founded in 2017 has so far backed companies such as Spinny, Pharmeasy, FarEye, KukuFM, AppsForBharat, ApnaMart and others across its two funds. It last raised $227 million for its second fund in 2022.
Kumar said the firm will focus on companies at commercialisation stages rather than early research phases. “We will likely invest at TRL 6 or 7 and beyond. Companies need to either have revenues already or visibility to revenues within the next 12-18 months,” he said.
The firm is looking at sectors including semiconductors, drones, robotics, quantum computing, energy transition and spacetech, where Kumar believes India has a “right to win.” Kumar said the platform has already entered active deployment mode and expects to invest in four to five companies over the next nine months.
“We are not trying to cover every deeptech sector. We look at where India can build strategic advantages and where ecosystems are already emerging,” he said.Kumar said the rise of AI is reshaping venture investing, with AI driving revenue velocity while deeptech creates long-term defensibility. He added that future technology companies are unlikely to be “only software or only hardware”, and instead will increasingly combine both becoming Physical AI that has a moat.
The platform will also evaluate opportunities in what Kumar described as “sovereignty tech” - sectors where India seeks greater domestic capabilities and supply-chain independence.
“One part of our diligence process is evaluating how much of the supply chain can eventually be localised in India,” Kumar said. “If founders are not aligned with that long-term vision, we are unlikely to invest.”
Fundamentum’s launch comes amid rising investor interest in India’s AI and deeptech ecosystem, with multiple venture firms announcing specialised funds over the past year as sectors such as spacetech, defence tech, semiconductors and robotics attract policy support and larger pools of capital.
