Fundamentum Frontier Advisors (F2A), the Nandan Nilekani-anchored deeptech investment firm, is increasing the domestic allocation of its maiden fund by ₹500 crore to ₹2,500 crore after stronger-than-expected demand from local investors, underscoring growing interest in a sector that has traditionally struggled to attract capital.
The firm is now targeting a ₹3,500 crore fund, up from its original ₹3,000 crore plan, with the additional capital coming from domestic limited partners (LPs), its top executives told Mint. The remaining ₹1,000 crore is allocated to an offshore vehicle.
“We’ve seen a lot of demand from domestic limited partners, which is why we’ve increased this portion to about by an additional ₹500 crore,” Vivek Singla, general partner at F2A, said in an interview. “We’re hoping to hit the new hard cap in a few weeks to a month or two.”
LPs are investors that commit capital to venture funds, leaving fund managers to make investment decisions on their behalf.
F2A’s domestic LP base includes local institutions, family offices and high-net-worth individuals. The pace of fundraising is notable for a fund targeting deeptech, where companies often require substantial capital and longer development cycles before generating returns.
The , after receiving approval from the Securities and Exchange Board of India (Sebi) at the end of April. It began approaching LPs in June.
The fundraising momentum comes as venture investors increasingly turn to companies developing proprietary technology, even as the sector’s capital requirements and long gestation periods make it a challenging investment proposition.
Deeptech startups raised $1.7 billion in 2025, according to Tracxn data, compared with $2 billion in 2024. Funding has already reached $2.7 billion so far this year.
Domestic investors step in
The shift extends beyond specialist deeptech funds. Domestic growth investors, which have typically stayed away from the sector, are now looking more closely at opportunities, as Mint reported earlier. For investors accustomed to businesses with more established growth indicators, however, evaluating deeptech companies requires a different approach.
“Domestic capital has become more forthcoming and enterprising in nature. We hadn’t seen such feedback in the last two years. It is pretty encouraging for us,” said Debraj Banerjee, general partner at F2A.
The shift is also coming from founders, particularly those building strategically important technologies. Some are increasingly attentive to the origin of their funding as they consider regulatory requirements, government contracts and, eventually, public listings.
“What’s the domicile nature of sovereignty-oriented technologies that these companies is a real question. If they want to actually remain viable, they need a domicile structure that addresses government oriented requirements,” Banerjee said.
F2A has encountered founders, particularly in defence, who ask whether prospective investors are domestic or foreign because foreign capital can make it harder to access certain opportunities. In such cases, the firm actively brings in its domestic investment vehicle to back the company.
East Asian capital bets
While domestic demand has prompted F2A to expand its local allocation, its foreign capital is coming largely from Japanese and South Korean businesses. The firm has set aside ₹1,000 crore for an offshore vehicle based in Seoul, South Korea.
“East Asian businesses believe that India will go up the technology curve, value will be created,” said Singla. “It’s a large market, but they want to be ahead while the ecosystem is being created, come in early and really entrenched themselves, both in terms of the ecosystem, and entry points in terms of valuation.”
The interest is part of a broader push by East Asian investors to establish a foothold in India’s technology ecosystem.
In April, South Korean technology conglomerates to manage a ₹6,000 crore India-focused fund backing early-growth-stage technology startups.
In June, Mint reported that the had met at least five Indian venture funds as they considered taking LP positions to expand their presence in the country.
Japanese venture capital firms , with some setting up localized funds, as Mint reported.
In the pipeline
With fundraising still under way, F2A is preparing to deploy capital. The firm expects three deals to close by the first quarter of 2027, although its partners declined to identify the companies.
“Semiconductors is one, which is on the data centre supply chain side. The other two are artificial intelligence bets – one in consumer, one in enterprise,” said Banerjee.
The firm has 75 deals at various stages of discussion, negotiation and evaluation. It expects to add six to nine companies over the next 18 months and build a portfolio of 12-15 companies over three years.