Cabinet Clears ₹10,000 Crore Fund to Back Deep-Tech Startups, Mobilise Venture Capital

The Union Cabinet has approved a second ₹10,000 crore Fund of Funds (FoF 2.0) under Startup India to strengthen venture capital availability and support innovation-led startups across India, with a sharper focus on deep-tech and technology-driven manufacturing ventures, as per PTI reports. 

Focus Areas and Strategic Objectives 

The new fund has been structured with a targeted funding approach to back deep-tech startups, technology-led manufacturing ventures, early-growth stage companies, and sector-agnostic enterprises.  

It aims to channel long-term domestic capital into high-risk, high-impact innovations that typically struggle to secure early financing.  

The scheme also seeks to strengthen smaller venture capital funds and widen funding access beyond major metropolitan hubs, encouraging innovation in emerging startup ecosystems across the country. 

“The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the establishment of the Startup India Fund of Funds 2.0 with a total corpus of ₹10,000 crore for the purpose of mobilising venture capital for the startup ecosystem of the country,” the government said. 

Track Record of FoF 1.0 and Ecosystem Impact 

The second phase builds on the outcomes of FoF 1.0, launched in 2016, which played a key role in developing India’s venture capital ecosystem and supporting first-time founders.  

Under the earlier phase, the full ₹10,000 crore corpus was committed to 145 Alternative Investment Funds (AIFs), which collectively deployed more than ₹25,500 crore across over 1,370 startups in sectors including agriculture, artificial intelligence, robotics, cleantech, healthcare, fintech, manufacturing, space technology and biotechnology. 

Since the launch of Startup India in 2016, the number of government-recognised startups has grown from around 500 to over 2 lakhs, with more than 49,400 recognised in 2025 alone.  

India currently has close to 100 unicorns, defined as startups valued at $1 billion or more. The government has also expanded eligibility for startup recognition by increasing the turnover threshold to ₹200 crore. 

Funding Structure, Governance and Implementation 

FoF 2.0 has been designed to accelerate the next stage of India’s startup growth by addressing funding gaps, crowding in private capital and strengthening the domestic venture capital base, particularly smaller funds. The scheme will be overseen by an Empowered Committee to guide implementation and strategic direction. 

“The Startup India Fund of Funds 2.0 follows the strong performance of the Fund of Funds for Startups (FFS 1.0), which was launched in 2016 to address funding gaps and catalyse the domestic venture capital market for startups,” the statement said. 

Read More: India Crosses 2 Lakh Startups by Dec 2025, Marks a Decade of Startup India! 

Conclusion 

FoF 2.0 strengthens India’s startup funding ecosystem by closing high-risk capital gaps, backing deep-tech and manufacturing ventures, and expanding access beyond metros. Building on FoF 1.0, it aims to attract private capital, support new founders, and drive innovation-led growth nationwide. 

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