PTI
New Delhi
The government on Saturday said it has approved a Rs 10,000 crore Fund of Funds to mobile venture capital and support deep tech, tech-driven innovative manufacturing startups, and early-growth stage enterprises.
This was the second part of the Fund of Funds (FoF) scheme under the Startup India initiative. The first was established in 2016.
The FOF 2.0 has been designed to continue the momentum of investments in startups, with an expanded scope over FFS 1.0.
“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 Rs 10,000 crore for the purpose of mobilising venture capital for the startup ecosystem of the country,” a government statement said.
The cabinet approved the second tranche of the Startup India Fund of Funds Scheme on Friday.
The scheme, it said, is designed to accelerate the next phase of India’s startup journey by mobilising long-term domestic capital, strengthening the venture capital ecosystem, and supporting innovation-led entrepreneurship across the country.
In 2016, the government constituted a Fund of Funds worth Rs 10,000 crore to provide seed capital and enable startups to take calculated risks. Following the successful utilisation of the first tranche, a second phase of Rs 10,000 crore was sanctioned in the Union Budget for 2025-26.
There are about 100 unicorns at present. A unicorn refers to a startup valued at $1 billion or more.
Since the launch of Startup India in 2016, the number of government-recognised startups has risen from about 500 units recognised as startups to over two lakh at present. More than 49,400 startups were recognised in 2025, the highest in a single year.
“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.
Under the part of the fund, the entire corpus of Rs 10,000 crore has been committed to 145 Alternative Investment Funds (AIFs).
Such supported AIFs have invested over Rs 25,500 crore in more than 1,370 startups across the country in various sectors, such as agriculture, artificial intelligence, robotics, automotive, clean tech, consumer goods and services, e-commerce, education, fintech, food and beverages, healthcare, manufacturing, space tech, and biotechnology, amongst others.
This fund played a key role in nurturing first-time founders, crowding in private capital, and helping build a strong foundation for India’s venture capital ecosystem.
While the first phase built the ecosystem, the second phase is designed to take Indian innovation to the next level.
The new fund will have a targeted, segmented funding approach to support deep tech and tech-driven innovative manufacturing.
It will prioritise breakthroughs in high-tech areas that require long-term capital.
The focus will also be on empowering early-growth stage founders to provide a safety net for new and innovative ideas, reducing early-stage failures caused by a lack of funding.
Further, it will encourage investments beyond major metros so that innovation thrives in every corner of the country.
The statement said it has been designed to address high-risk capital gaps and strengthen India’s domestic venture capital base, particularly smaller funds, to further boost the domestic investment landscape.
