In a major boost to India’s startup ecosystem, the Union Cabinet chaired by Prime Minister Narendra Modi has approved the Startup India Fund of Funds 2.0 with a total corpus of Rs 10,000 crore to mobilize venture capital for the country’s startup sector.
The scheme, launched under the Startup India initiative, aims to accelerate India’s next startup phase by mobilizing long-term domestic capital, strengthening the venture capital ecosystem, and supporting innovation-led entrepreneurship nationwide. It will provide patient capital to deep tech companies, technology-driven innovative manufacturing ventures, and early-growth stage enterprises requiring long-term funding.
This is the second phase of the Fund of Funds for Startups. The first phase (FFS 1.0), launched in 2016, committed its entire Rs 10,000 crore corpus to 145 Alternative Investment Funds (AIFs). These supported AIFs invested over Rs 25,500 crore in more than 1,370 startups across sectors like AI, robotics, fintech, healthcare, space tech, and biotechnology.
Startup India FoF 2.0 will have a targeted, segmented funding approach focusing on five key areas: deep tech and tech-driven innovative manufacturing, empowering early-growth founders, national reach beyond major metros, addressing high-risk capital gaps, and strengthening India’s domestic venture capital base, particularly smaller funds.
India’s startup ecosystem has witnessed extraordinary transformation since Startup India launched in 2016, growing from fewer than 500 startups to over 2 lakh DPIIT-recognised startups today, with 2025 marking the highest annual startup registrations. These startups have generated over 21 lakh direct jobs.
The fund will contribute to the corpus of SEBI-registered AIFs for investing in entities recognised as ‘startups’ by the Central Government, with commitments spread across the 16th and 17th Finance Commission cycles. Aligned with Viksit Bharat @ 2047, the Fund represents India’s commitment to becoming a global innovation hub.
FAQs [Frequently Asked Questions]
Q1: What is the corpus of Startup India FoF 2.0?
Startup India Fund of Funds 2.0 has a total corpus of Rs 10,000 crore (US$ 1.2 billion) to mobilize venture capital for India’s startup ecosystem. The entire amount will be committed to SEBI-registered Alternative Investment Funds over 16th-17th Finance Commission cycles.
Q2: What segments will Fund 2.0 support?
Startup India FoF 2.0 will support deep tech startups, early-growth stage startups through smaller AIFs, technology-driven innovative manufacturing startups, and sector/stage agnostic startups. It prioritizes high-tech areas requiring patient capital and reduces early-stage failures from funding gaps.
Q3: How successful was the first phase?
FFS 1.0 committed its entire Rs 10,000 crore to 145 AIFs, which invested over Rs 25,500 crore in 1,370+ startups across AI, robotics, fintech, healthcare, space tech, and biotechnology. It played a pivotal role in nurturing first-time founders and building India’s venture capital foundation.