NE BUSINESS BUREAU
NEW DELHI, APR 14
In a decisive boost to India’s startup economy, the Government has notified the Startup India Fund of Funds 2.0 (FoF 2.0) with a massive ₹10,000 crore corpus, aimed at catalysing venture and growth capital for the country’s next wave of innovators.
- Mega Fund of Funds 2.0 aims to unlock venture capital at scale for India’s startup ecosystem
- Focused push for deep tech, early-stage ventures and cutting-edge manufacturing innovators
- Structured AIF-led investment model to bridge funding gaps and crowd in private capital
- Robust governance with VCIC oversight and multi-agency execution framework
- Aligned with Viksit Bharat vision to power jobs, innovation and global competitiveness
Building on the success of the 2016-launched Fund of Funds for Startups (FFS 1.0), the new scheme is designed to address persistent funding gaps while accelerating capital flow into high-impact, innovation-driven enterprises.
The Fund will deploy its corpus through SEBI-registered Alternative Investment Funds (AIFs), with commitments spread across the 16th and 17th Finance Commission cycles. The approach ensures wider capital mobilisation by leveraging institutional and private investments alongside government backing.
Crucially, FoF 2.0 sharpens its focus on priority sectors—including deep tech startups, early growth-stage ventures backed by smaller AIFs, and technology-driven, innovative manufacturing firms—while retaining flexibility to support sector-agnostic opportunities.
“Startup India FoF 2.0 will have a total corpus of ₹10,000 crore for commitments to eligible Alternative Investment Funds (AIFs).”
The scheme introduces a rigorous and transparent selection mechanism, with investments routed through AIFs screened by a Venture Capital Investment Committee (VCIC) comprising seasoned ecosystem experts. Oversight will be further strengthened by an Empowered Committee (EC) to monitor implementation and performance, alongside provisions for co-investment by government and institutional players under a well-governed framework.
“Investments under Startup India FoF 2.0 will focus on Alternative Investment Funds supporting priority segments including deep tech startups, early growth stage startups, technology-driven and innovative manufacturing startups.”
The Department for Promotion of Industry and Internal Trade will soon issue detailed operational guidelines and define the composition of the VCIC, ensuring clarity and speed in execution.
The Small Industries Development Bank of India will spearhead the rollout as the primary Implementation Agency, with an additional domestic agency to be appointed to scale execution.
“Startup India FoF 2.0 is expected to play a critical role in advancing India’s innovation-led growth agenda… strengthening economic resilience, boosting manufacturing capabilities, generating high-quality jobs, and positioning India as a global innovation hub.”
By channeling capital into globally competitive technologies and scalable business models, the initiative marks a strategic leap toward building a resilient, innovation-first economy—firmly aligned with the vision of Viksit Bharat @ 2047.
