IIFL Fintech Closes Rs 500 Crore Second Fund

IIFL Fintech Fund, supported by the IIFL Group, has completed the final close of its second fund, raising Rs 500 crore from domestic family offices and high-net-worth individuals (HNIs).

Also known as the Series II fund, it focuses on early-to-growth-stage fintech startups, especially those using generative AI to develop financial services products.

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“The fund plans to invest in 20 to 25 startups across lending, payments, compliance, wealthtech, Insurtech, and embedded finance,” said Mehekka Oberoi, fund manager, IIFL Fintech Fund.

Oberoi said that 20–25% of the second fund will be set aside for follow-on investments in the top-performing companies from the first fund.

IIFL Fintech had completed the first close of its second fund at Rs 200 crore in January 2025 and has already invested in five startups. These include education-focused fintech GrayQuest, voice AI startup Fundamento, banking infrastructure startup Knight Fintech, and a secondary share purchase in document infrastructure company Leegality, among others.

IIFL Fintech closed its first fund in 2022 after raising Rs 200 crore. Through this fund, it invested in 14 startups, including Leegality, digital credit infrastructure platform FinBox, regulatory tech startup DataSutram, and fraud detection startup TrustCheckr which was later acquired by Truecaller.

“We actively partner with fintech founders to help them validate, deploy, and scale their solutions within a large financial services ecosystem,” said Prakash Bulusu, Joint CEO, IIFL Capital.

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