Nexus VC Splits New $700M Fund Between AI and India

Silicon Valley and India-based venture firm Nexus Venture Partners has launched a new $700 million fund, deliberately splitting its capital between cutting-edge AI startups and India’s rapidly expanding digital economy to mitigate the risks of an overheated AI market.

While artificial intelligence has recently soaked up most of the venture capital raised globally, the 20-year-old venture firm is taking a diversified approach. Instead of chasing a single, crowded tech sector, Nexus is balancing its AI investments with targeted bets on Indian consumer, fintech, and digital infrastructure startups.

Balancing the AI Hype with India’s Digital Surge

Nexus argues that crowding entirely into AI carries significant valuation and execution risks. India’s digital economy serves as a strategic counterbalance, offering a high-growth market where AI adoption is rising alongside diverse, real-world commercial opportunities.

This dual-focus strategy is built into the firm’s DNA. Headquartered in Delaware with physical offices in Menlo Park, Mumbai, and Bengaluru, Nexus has operated as a single, fully integrated U.S.–India team since its inception in 2006.

A Proven Cross-Border Investment Model

By investing from a single pool of capital, Nexus backs both early-stage global software innovations and India-centric enterprises. Over nearly two decades, its cross-border software investments have spanned developer tools, infrastructure, and AI agent startups.

Powering U.S. Infrastructure and Indian Consumer Giants

The firm’s U.S. portfolio features highly successful developer tooling and AI infrastructure companies, including Postman, Apollo, MinIO, Giga, and Firecrawl. Meanwhile, its Indian portfolio has scaled massively across consumer tech, logistics, and fintech, with notable investments in Zepto, Delhivery, Rapido, Turtlemint, and Infra.Market.

“AI is a huge inflection point, and we are anchoring on that,” Jishnu Bhattacharjee, a managing partner at Nexus Venture Partners in the U.S., stated in an interview. “But we are also seeing that many of these AI innovations are actually getting used to serve the masses better.”

Why Nexus Kept Fund VIII Capped at $700 Million

Nexus currently manages $3.2 billion in capital across its various funds and has backed more than 130 companies. The firm’s long-horizon, early-stage approach has yielded over 30 successful exits, including multiple IPOs.

According to Abhishek Sharma, a U.S.-based managing partner at Nexus, the firm’s sweet spot remains inception-stage, seed, and Series A rounds. Initial checks typically range from a few hundred thousand dollars to approximately $1 million.

Operating with an efficient eight-member investment team, Nexus has intentionally capped its eighth fund at $700 million—the exact same size as Fund VII, which was introduced when launching Fund VII in 2023. The firm generally raises new capital every 2.5 to 3 years.

“We don’t want to raise money for the sake of raising,” Bhattacharjee explained, emphasizing that $700 million represents the optimal capital size for executing their disciplined early-stage strategy.

How India is Leapfrogging in the AI Ecosystem

Though India’s AI landscape is still developing compared to the U.S., Nexus believes the country is uniquely positioned to leapfrog traditional development cycles. This acceleration is driven by India’s massive developer talent pool, robust public digital infrastructure, and a pressing demand for localized models supporting regional languages.

These dynamics are pushing Indian startups to build practical AI applications and autonomous agents at an accelerated pace, often utilizing open-source tools and emerging domestic infrastructure.

Nexus points to portfolio companies like Zepto and Neysa to demonstrate how AI is being deployed on the ground. Zepto, a leading quick-commerce platform, utilizes AI extensively across customer support, supply chain routing, and fulfillment. On the infrastructure side, companies like Neysa are emerging to address sovereign AI workloads, localized data handling, and regional language processing tailored specifically to the Indian market.

Strong LP Support Across Global Markets

While Nexus did not disclose specific fund performance metrics, the partners confirmed that strong historical returns allowed them to secure the majority of Fund VIII’s capital from returning limited partners (LPs). The firm’s global investor base spans institutional backers across the U.S., Europe, the Middle East, Southeast Asia, and Japan.