IIFL Fintech floats Rs 500 Cr Fund II

IIFL Group backed IIFL Fintech Fund has announced the final close of its second fund after raising Rs 500 crore from domestic family offices and high net worth individuals.

The Series II fund targets early to growth stage fintech startups, with a focus on companies using generative artificial intelligence to build financial services products.

The fund plans to invest in 20 to 25 startups across lending, payments, compliance, wealthtech, insurtech, and embedded finance. Around 20 to 25 percent of the second fund will be allocated for follow on investments in top performing companies from its first fund.

IIFL Fintech had announced the first close of its second fund at Rs 200 crore in January 2025 and has already backed five startups through this. These include companies such as education focused fintech GrayQuest, voice AI startup Fundamento, banking infrastructure startup Knight Fintech, and a secondary share purchase in document infrastructure firm Leegality, among others.

According to IIFL Fintech, it actively partners with fintech founders to help them validate, deploy, and scale their solutions within a large financial services ecosystem.

The fund closed its first fund in 2022 after raising Rs 200 crore. IIFL Fintech Fund was set up in 2021 with the aim of investing in early stage fintechs that the IIFL Group could collaborate with. Over the last four years, the IIFL Fintech Fund has invested across multiple fintech segments. Its portfolio includes Leegality, FinBox, DataSutram, Finarkein Analytics, Finvu, Trendlyne, Insurance Samadhan, Xtracap Finance, Castler, Vitra.ai, EasyRewardz, Multipl, Riskcovry, and TrustCheckr, which was sold to Truecaller.