IIFL Fintech Fund, backed by the financial services powerhouse IIFL Group, has announced the final close of its second fund (Series II) after successfully raising ₹500 crore. The capital was primarily secured from domestic family offices and ultra-high-net-worth individuals (UHNIs), signaling strong confidence in the Indian fintech landscape.
The Series II fund is strategically designed to back early-to-growth-stage startups, with a specific mandate to identify and nurture companies leveraging Generative Artificial Intelligence (GenAI) to revolutionize financial services.
A GenAI-First Investment Thesis
While the first fund (raised in 2022) focused on foundational fintech infrastructure, Series II marks a pivot toward the next frontier of intelligence. The fund plans to deploy capital across 20 to 25 startups in high-impact sectors, including:
A significant 20% to 25% of the corpus is also reserved for follow-on investments in top-performing companies from Fund I, ensuring continued support for the winners in the existing portfolio.
Early Traction and Portfolio Momentum
IIFL Fintech Fund had already achieved a first close of ₹200 crore in January 2025 and has been active in the market. Fund II has already backed five promising ventures, including:
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GrayQuest: Education-focused fintech.
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Fundamento: Voice AI startup for financial operations.
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Knight Fintech: Banking infrastructure specialist.
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Leegality: A secondary share purchase in the document infrastructure firm.
The fund’s predecessor (Fund I) has already demonstrated a robust track record, including the full exit of TrustCheckr to Truecaller and a partial exit from FinBox that delivered a 5x multiple on invested capital.
The “IIFL Ecosystem” Advantage
Beyond providing capital, IIFL Fintech Fund distinguishes itself through a “collaborative” approach. Startups gain a unique sandbox environment within the IIFL Group to:
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Validate: Test products in a real-world, large-scale financial environment.
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Deploy: Gain immediate entry as a technology partner for IIFL’s various business verticals.
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Scale: Leverage the group’s deep institutional knowledge and vast customer base to accelerate GTM strategies.
“Our objective is to identify future market leaders who are not just building tools, but are using GenAI to fundamentally rethink the financial services stack,” said Mehekka Oberoi, Fund Manager at IIFL Fintech Fund.
By: Vanshika Tayal
