NEW DELHI: The Union Cabinet has approved the establishment of the Startup India Fund of Funds 2.0 (Startup India FoF 2.0) with a total corpus of Rs 10,000 crore. The Startup India FoF 2.0 builds on nearly a decade of sustained efforts to make India one of the world’s leading startup nations.
The scheme 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, the Ministry of Commerce & Industry said in a statement.
While the first phase built the ecosystem, Startup India FoF 2.0 will take Indian innovation to the next level, the government said. The fund will employ a targeted, segmented funding approach to support deep tech and tech-driven innovative manufacturing, empowering early-growth-stage founders and encouraging investment beyond major metros.
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.
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.
“By supporting startups that build globally competitive technologies, products, and solutions, the Fund will contribute to strengthening India’s economic resilience, boosting manufacturing capabilities, generating high-quality jobs, and positioning India as a global innovation hub,” the government said in a note.
The Startup India FoF 2.0 follows 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 Startup India Fund of Funds 2.0 follows the strong performance of the Fund of Funds for Startups, which was launched in 2016 to address funding gaps and catalyse the domestic venture capital market for startups,” the government said.
Under the first FoF, the entire corpus of Rs 10,000 crore has been committed to 145 Alternative Investment Funds, who have invested Rs 25,500 crore in more than 1,370 startups across the country in sectors such as agriculture, AI, robotics, automotive, clean tech, consumer goods & services, e-commerce, education, fintech, food & 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.