Nexus Raises $700 Million to Back AI and India’s Next Wave of Startups

Nexus Venture Partners has secured a new $700 million fund. The venture capital firm announced its eighth fund this week. It plans to invest in two major areas.

This strategy bucks the trend of funds pouring money solely into artificial intelligence. According to TechCrunch, Nexus will split its capital between AI startups and India-focused consumer and infrastructure companies.

A Deliberate Dual-Track Investment Strategy

The firm manages over $3.2 billion in total assets. Its new fund matches the size of its previous 2023 fund. Nexus decided not to raise more capital deliberately.

Partners believe $700 million is the right amount for their early-stage focus. They typically write first checks from a few hundred thousand dollars to $1 million. The firm prefers seed and Series A investments.

This dual focus reflects Nexus’s 20-year history. It has operated a single, integrated U.S.-India team since 2006. The firm backs software startups globally and India-centric businesses from the same fund.

Its U.S. portfolio includes tools like Postman and MinIO. In India, it has backed companies like quick-commerce giant Zepto and logistics firm Delhivery. This balanced approach aims to mitigate risk in an overheated AI market.

Why India Presents a Unique AI Growth Opportunity

While U.S. AI development is more advanced, Nexus sees leapfrog potential in India. The country’s vast talent pool and digital expansion are key factors. Demand for localized AI models is also rising.

India has many languages and unique service needs. Startups there are building applications faster, often using open-source tools. This creates opportunities for domestic AI infrastructure companies.

Partners cite portfolio companies as examples. Zepto uses AI deeply for customer support and delivery routing. Infrastructure player Neysa addresses sovereign AI and localized data needs.

The firm’s confidence is backed by strong returns. Nexus told TechCrunch that returning limited partners largely filled this new fund. Its investor base spans the U.S., Europe, the Middle East, and Asia.

The $700 million fund signals a pragmatic venture capital approach. It bets on AI’s transformative power while anchoring investments in India’s massive, tangible digital economy growth.

Thought you’d like to know

Q1: How much is Nexus Venture Partners’ new fund?

The firm has raised $700 million for its eighth fund. This amount matches the size of its previous fund from 2023. The partners stated this is the ideal size for their early-stage investment strategy.

Q2: What types of startups will Nexus invest in?

Nexus will invest in two main categories. The first is artificial intelligence startups globally. The second is India-focused startups in consumer services, fintech, and digital infrastructure.

Q3: What stage of companies does Nexus target?

The firm primarily targets early-stage companies. Its sweet spot is from inception to seed and Series A funding rounds. Initial checks often range from a few hundred thousand dollars to around $1 million.

Q4: Why is Nexus investing in India’s AI sector?

Partners believe India can leapfrog in specific AI areas. The country has a large tech talent pool and rising digital infrastructure. There is also growing demand for AI models that support India’s many local languages and services.

Q5: How does Nexus benefit from a U.S.-India strategy?

The integrated team allows cross-pollination of insights. It balances exposure to cutting-edge software innovation with investments in a massive, expanding digital economy. This diversification helps manage risk across different market cycles.