Government Launches ₹10,000 Crore Startup India FoF 2.0 to Boost Funding

The government has notified the Startup India Fund of Funds 2.0 (FoF 2.0) with a total corpus of ₹10,000 crore to strengthen access to venture and growth capital for startups across the country.

The new fund builds on the performance of the earlier Fund of Funds for Startups (FFS 1.0), launched in 2016 under the Startup India initiative to bridge funding gaps and catalyse domestic capital formation in the startup ecosystem.

Investment Focus and Structure

FoF 2.0 will deploy capital through commitments to eligible Alternative Investment Funds (AIFs) over the 16th and 17th Finance Commission cycles. The investments will prioritise deep tech startups, early-stage ventures backed by smaller AIFs, technology-driven and innovative manufacturing firms, along with other high-growth startups across sectors.

Robust Selection and Governance Framework

The scheme will follow a structured evaluation process, with a Venture Capital Investment Committee (VCIC) comprising industry experts screening AIF proposals. Oversight will be ensured through an Empowered Committee (EC), alongside strong monitoring mechanisms. The framework also allows for co-investments by the government and institutional investors with appropriate safeguards.

Guidelines and Oversight by DPIIT

Detailed operational guidelines, including the composition of the VCIC, will be issued by the Department for Promotion of Industry and Internal Trade (DPIIT) to ensure smooth execution of the scheme.

Implementation Led by SIDBI

The Small Industries Development Bank of India (SIDBI) will act as the primary implementation agency from the date of notification, with an additional domestic agency to be appointed. The fund will invest in SEBI-registered AIFs, which will further channel capital into government-recognised startups.

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Driving Innovation and Economic Growth

Startup India FoF 2.0 is expected to play a pivotal role in advancing India’s innovation-led growth by supporting globally competitive startups, boosting manufacturing capabilities, generating high-quality employment, and strengthening the country’s position as a global innovation hub.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation or investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.