According to TechCrunch, Nexus Venture Partners has closed a new $700 million fund, its eighth. The firm, which manages $3.2 billion total, is deliberately splitting this fund’s focus, dedicating roughly half to AI startups and the other half to India-focused startups in consumer, fintech, and digital infrastructure. Managing partners Jishnu Bhattacharjee and Abhishek Sharma explained the strategy, noting their sweet spot remains inception to Series A with initial checks as small as a few hundred thousand dollars. The firm, founded in 2006 with an integrated U.S.-India team, is keeping the fund size identical to its 2023 fund, believing $700 million is the right amount for its early-stage strategy. They cite over 30 exits, including IPOs, from their portfolio of more than 130 companies like Postman, Zepto, and Delhivery.
Nexus Bucks the All-In AI Trend
Here’s the thing: in today’s venture landscape, announcing a fund that isn’t 90% focused on AI almost feels rebellious. Every pitch deck has an AI slide, and capital has been flooding into the category, often at insane valuations. Nexus is making a calculated bet that crowding into a single, overheated category is risky. And you know what? They’re probably right. By anchoring half its capital in India’s expanding digital economy, it’s building in a natural hedge. It’s a classic “don’t put all your eggs in one basket” move, but from a firm that has operated a single, cross-border fund since day one, it’s less a diversification play and more a doubling down on its core, two-track identity.
Why India, Why Now?
The partners make a compelling case that India isn’t just a separate, non-AI play. They see the markets converging. India’s massive talent pool and rising digital infrastructure are creating a petri dish for AI applications that serve its unique, massive population. Think localization: models that handle dozens of languages, or agents built for specific service needs. They point to portfolio company Zepto, a quick-commerce player, as an example of a consumer business that’s already deeply AI-native in its operations. So the bet is that Indian startups will leapfrog in applying AI, often building on open-source tools and emerging domestic infrastructure companies like another portfolio company, Neysa. It’s not just about funding AI *in* India, but funding the companies that will use AI to win the Indian market.
The Steady Hand Approach
In a world where fund sizes seem to only go up, Nexus holding steady at $700 million is another quiet signal. Bhattacharjee said they “don’t want to raise money for the sake of raising.” That’s a refreshing bit of discipline. A giant fund pressures you to write bigger checks, chase later stages, and potentially drift from your expertise. By staying at a size that works for their early-stage sweet spot, they’re trying to avoid that bloat. It suggests confidence that their model—finding early gems in both cross-border SaaS and India-centric businesses—can deliver returns without needing a war chest of billions. Their claim that the fund was largely filled by returning LPs is the best evidence that this strategy has worked so far.
Winners, Losers, and the Big Picture
So who benefits from this strategy? Early-stage founders in both the U.S./global AI scene and in India get a committed, sector-agnostic investor that isn’t just chasing the hype cycle. It’s a win for Indian startups in “boring” but massive sectors like logistics and digital infrastructure, which might struggle for attention from a purely AI-focused fund. The loser, in a sense, is the narrative that you must specialize to the extreme to win in VC. Nexus is betting that a balanced, integrated portfolio built on deep regional knowledge is a stronger long-term play. Will they miss out on the hypothetical next OpenAI by not going all-in? Maybe. But they might also avoid the catastrophic losses from the inevitable AI shakeout, while simultaneously owning a piece of the foundational companies building India’s next digital decade. That seems like a pretty smart balance.
