Key takeaways
- Cabinet approves ₹10,000 crore Startup India Fund of Funds 2.0 to boost venture capital.
- Fund prioritizes deep tech, tech-driven manufacturing, and early-growth startups across India.
- Aims to address high-risk capital gaps and strengthen funding for smaller venture capital funds.
- Encourages investment in innovation beyond major cities to foster regional growth.
- Follows successful Fund of Funds for Startups 1.0, which supported over 1,370 startups.
The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the Startup India Fund of Funds (FoF) 2.0 with a corpus of ₹10,000 crore to mobilise venture capital for startups across India.
The decision aims to strengthen domestic capital, support innovation-led enterprises, and expand access to funding beyond major cities. The government said the scheme will back deep tech, tech-driven manufacturing, and early-growth startups.
It seeks to address high-risk capital gaps and strengthen the venture capital base, particularly for smaller funds. The fund also aligns with the national vision of Viksit Bharat by 2047.
The scheme will also support early-growth founders and reduce failures caused by funding shortages. It aims to encourage investment beyond major metros, enabling innovation to grow across regions.
The new fund follows the Fund of Funds for Startups (FFS) 1.0, launched in 2016 under the Startup India initiative. The earlier scheme committed its entire ₹10,000 crore corpus to 145 Alternative Investment Funds.
These AIFs invested over ₹25,500 crore in more than 1,370 startups across sectors. These include agriculture, AI, robotics, automotive, clean tech, consumer services, e-commerce, education, fintech, healthcare, manufacturing, space technology and biotechnology.
The government said FFS 1.0 helped nurture first-time founders and crowd in private capital. It added that the scheme laid the foundation for India’s venture capital ecosystem. Startup India FoF 2.0 will adopt a targeted funding approach, prioritising deep tech and technology-driven manufacturing that require long-term capital support.
According to the government, the fund will strengthen India’s domestic venture capital base and direct capital to priority sectors linked to economic growth and self-reliance.
Since the launch of Startup India in 2016, recognised startups have grown from fewer than 500 to over 2 lakh, as per the promotion of industry and internal trade department. The government said 2025 recorded the highest annual startup registrations to date.
The government stated that the new fund will support startups building globally competitive technologies and products. It added that the initiative will generate more jobs and strengthen economic resilience.
