Union Cabinet Greenlights Startup India Fund of Funds 2.0 with Rs 10,000 Crore Corpus
The Union Cabinet has given its approval for the Startup India Fund of Funds 2.0 (Startup India FoF 2.0), establishing a substantial total corpus of Rs 10,000 crore. This strategic initiative is designed to mobilize venture capital specifically for India's burgeoning startup ecosystem, marking a significant step forward in the nation's economic development.
Accelerating the Next Phase of Startup Growth
The primary objective of this scheme is to accelerate the next phase of India's startup growth by mobilizing long-term domestic capital. It aims to strengthen the venture capital ecosystem and support innovation-led entrepreneurship across a diverse range of sectors. This fund builds upon the foundational Startup India initiative launched in 2016, under which India's startup landscape has experienced remarkable expansion.
Since 2016, the number of Department for Promotion of Industry and Internal Trade (DPIIT)-recognized startups has surged from fewer than 500 to over 2 lakh. Notably, the year 2025 recorded the highest-ever annual startup registrations, highlighting the dynamic growth and increasing entrepreneurial activity in the country.
Building on the Success of FFS 1.0
Startup India FoF 2.0 follows the Fund of Funds for Startups (FFS 1.0), which was launched in 2016 to bridge funding gaps and catalyze the domestic venture capital market. Under FFS 1.0, the entire Rs 10,000 crore corpus was committed to 145 Alternative Investment Funds (AIFs).
These AIFs have invested over Rs 25,500 crore in more than 1,370 startups across various sectors, including:
- Agriculture
- Artificial Intelligence
- Robotics
- Automotive
- Clean Tech
- Consumer Services
- E-commerce
- Education
- Fintech
- Healthcare
- Manufacturing
- Space Tech
- Biotechnology
The first phase played a crucial role in nurturing first-time founders, crowding in private capital, and strengthening the domestic venture capital ecosystem, setting a strong precedent for the new fund.
Targeted Focus on Deep Tech and Manufacturing
Startup India FoF 2.0 will adopt a targeted and segmented funding approach, with a specific focus on several key areas:
- Deep Tech and Tech-Driven Innovative Manufacturing: Supporting sectors that require long-term capital for research and development.
- Early-Growth Stage Founders: Aiming to reduce funding-linked early failures by providing crucial support during vulnerable phases.
- Wider National Reach: Extending beyond major metro startup hubs to foster entrepreneurship across the country.
- Addressing High-Risk Capital Gaps: Focusing on priority sectors where traditional funding may be scarce.
- Strengthening Domestic Venture Capital: Particularly supporting smaller funds to enhance the overall ecosystem.
The fund is expected to support startups that are building globally competitive technologies, products, and solutions. This initiative is poised to boost manufacturing, create jobs, and drive innovation-led growth, contributing significantly to India's economic landscape.
Alignment with Viksit Bharat @ 2047 Vision
The government has stated that this fund aligns with the Viksit Bharat @ 2047 vision, a long-term strategy aimed at developing India into a developed nation by 2047. The fund is specifically designed to strengthen India's economic resilience, enhance innovation capacity, and improve global competitiveness in emerging technologies and high-growth sectors.
By providing targeted financial support, Startup India FoF 2.0 aims to empower entrepreneurs and foster a robust environment for technological advancement and sustainable economic progress.
