Canadian pension fund and institutional investor La Caisse de dépôt et placement du Québec (CDPQ), has made an initial investment of $20 million in the first growth fund of Nandan Nilekani‘s Fundamentum, a $100 million fund that he had set up last year with Helion’s Sanjeev Aggarwal. This marks CDPQ’S first investment in a venture capital fund in India.
Nilekani and Aggarwal had set up Fundamentum as a growth-capital fund for mid-stage technology companies in India, announcing it in July last year. ET was the first to report in March last year about the plans to set up the fund.
The first fund under Fundamentum is called Fundamentum Partnership – Fund I and is expected to invest an average of up to US$15 million in select startups. It will focus on investments in consumer and enterprise technology businesses across retail, logistics, travel, and outsourcing.
The founders had said that the corpus may be extended to $200 million if the fund sees more opportunities. They, however, did not comment on the total fund size reached now.
The fund will see one-third of the corpus coming from Nilekani and Aggarwal. Fundamentum has also brought onboard several entrepreneurs who will also invest in the fund.
“We began the fund as a fund for entrepreneurs. Apart from money Sanjeev and I have put in, we have got a lot of entrepreneurs who can help the small guys become big. What we found attractive about CDPQ is their worldview of building large businesses,” Nilekani told ET.
“I think the way see this partnership is we get access to their global network and knowledge. And they become part of this scale up. I think it is the start of a longer relationship which can have longer dimensions,” he added.
CDPQ, which is is a long-term institutional investor that manages funds primarily for public and parapublic pension and insurance plans, will invest in Fundamentum and also make direct investments in Fundamentum’s consumer internet portfolio companies in the near future. As at December 31, CDPQ held CAD 298.5 billion ($ 238.2 billion) in net assets.
“There is a pretty strong affinity of interest here. One of the areas where we wanted to get more involved in, because it is so important to the evolution of the Indian economy, is the combination of technology and entrepreneurship,” Michael Sabia, CEO of CDPQ, told ET.
“One of the things that set Fundamentum apart in our minds is that it is about building bigger businesses. It is not about just funding relatively early stage businesses but finding winning ones and then helping them scale. There are too many small businesses that get built to be sold. The objective here is to build businesses that last,” he added.