New Delhi: In a major push to India’s fast-growing startup ecosystem, the Union Cabinet chaired by Prime Minister Narendra Modi has approved the setting up of the Startup India Fund of Funds 2.0 with a total corpus of Rs 10,000 crore.
The new fund aims to mobilise long-term domestic capital and provide stronger financial backing to startups across the country.
The scheme is designed to accelerate the next phase of India’s startup journey by strengthening the venture capital ecosystem and supporting innovation-driven entrepreneurship.
The government said the fund will help channel more patient and risk capital into emerging and high-potential sectors.
Startup India FoF 2.0 builds on the success of the earlier Fund of Funds for Startups (FFS 1.0), which was launched in 2016 under the Startup India initiative.
Since the launch of Startup India in 2016, India’s startup ecosystem has seen massive growth.
The number of startups has risen from fewer than 500 to more than 2 lakh startups recognised by the Department for Promotion of Industry and Internal Trade (DPIIT).
The year 2025 has recorded the highest-ever annual startup registrations so far.
Under FFS 1.0, the entire Rs 10,000 crore corpus was committed to 145 Alternative Investment Funds (AIFs).
These AIFs have collectively invested more than Rs 25,500 crore in over 1,370 startups across sectors such as agriculture, artificial intelligence, robotics, automotive, clean technology, consumer goods, e-commerce, education, fintech, food and beverages, healthcare, manufacturing, space technology and biotechnology.
The first phase played a key role in supporting first-time founders and attracting private capital into the venture ecosystem.
The new fund aims to take this momentum further. Startup India FoF 2.0 will adopt a more focused and segmented funding strategy.
It will prioritise deep tech and technology-driven innovative manufacturing projects that require long-term investment.
It will also provide support to early-growth stage founders to reduce failures caused by lack of funding.
The government has also emphasised that the fund will promote investments beyond major metro cities so that innovation can grow across all regions of the country.
In addition, it will address high-risk capital gaps in sectors important for self-reliance and economic growth, while strengthening India’s domestic venture capital base, particularly smaller funds.
(IANS)
