In a major push for India’s startup sector, the Union Cabinet has cleared the Startup India Fund of Funds 2.0 (FoF 2.0). The new scheme will provide Rs 10,000 crore in funding support to mobilize more venture capital for startups and help the ecosystem grow faster.
The government said the scheme is designed to bring in long-term domestic capital, improve access to funding, and support innovation-led businesses. It will especially focus on deep-tech startups, technology-driven manufacturing companies, and early-stage firms that often struggle to get patient capital.
FoF 2.0 builds on the success of the first Fund of Funds for Startups, launched in 2016. Under the earlier scheme, the full Rs 10,000 crore corpus was committed to 145 Alternative Investment Funds (AIFs), which together invested more than Rs 25,500 crore in over 1,370 startups across sectors such as fintech, AI, robotics, healthcare, manufacturing, space tech, clean tech, and biotechnology.
The startup ecosystem in India has grown sharply over the last decade. According to the government, the number of DPIIT-recognised startups has risen from fewer than 500 in 2016 to more than 2 lakh today, with 2025 recording the highest-ever annual startup registrations.
The new fund is also expected to expand investment beyond major metro cities and support startups in more regions. This can help build a wider innovation network and reduce dependence on a few large startup hubs.
With this approval, the government is aiming to boost entrepreneurship, create more jobs, and strengthen India’s position as a global startup destination. The move also fits the long-term vision of Viksit Bharat @ 2047.
FAQ [Frequently Asked Questions]
1. What is Startup India Fund of Funds 2.0?
It is a Rs 10,000 crore government scheme to support venture capital funds that invest in Indian startups, especially deep-tech and early-growth businesses.
2. How is it different from FoF 1.0?
FoF 2.0 focuses more on deep tech, innovative manufacturing, and early-stage startups, while also expanding funding beyond major cities.
3. Why is this important for startups?
It can improve access to long-term capital, reduce funding gaps, and help more startups grow, innovate, and attract private investment across India.