Government Approves Rs 10,000 Crore Fund for Startups
The Indian government has given the green light to a Rs 10,000 crore Fund of Funds aimed at providing support to deep tech startups and early-growth stage enterprises engaged in tech-driven innovative manufacturing. This initiative marks the second phase of the Fund of Funds (FoF) scheme under the Startup India program, following the initial launch in 2016.
Designed to sustain the momentum of investments in startups, the newly approved FOF 2.0 boasts an expanded scope compared to its predecessor, FFS 1.0. The Union Cabinet, led by Prime Minister Narendra Modi, has sanctioned the establishment of the Startup India Fund of Funds 2.0 with the objective of mobilizing venture capital for the country’s startup ecosystem.
The recently approved scheme aims at propelling the next phase of India’s startup journey by leveraging long-term domestic capital, fortifying the venture capital ecosystem, and fostering innovation-led entrepreneurship across the nation. With the first Fund of Funds worth Rs 10,000 crore established in 2016 to provide seed capital and facilitate startups in taking calculated risks, the government has now allocated an additional Rs 10,000 crore for the 2025-26 fiscal year.
Key Highlights of the Startup India Fund of Funds 2.0:
- Supporting deep tech and tech-driven innovative manufacturing
- Empowering early-growth stage enterprises
- Prioritizing breakthroughs in high-tech areas
- Encouraging investments beyond major metros
- Addressing high-risk capital gaps
- Strengthening India’s domestic venture capital base
Since the inception of Startup India in 2016, the number of government-recognized startups has surged from approximately 500 units to over two lakh presently. In 2025 alone, more than 49,400 startups were acknowledged, marking the highest number in a single year. The aim of the Fund of Funds 2.0 is to build on the success of FFS 1.0, which played a pivotal role in nurturing first-time founders and catalyzing the domestic venture capital market.
With a targeted funding approach, the new fund is set to support high-tech innovations that necessitate long-term capital, while also providing a safety net for early-growth stage founders. The initiative aims to reduce early-stage failures resulting from funding constraints and promote innovation across all regions of the country.
Impact of the Fund:
Supported Alternative Investment Funds (AIFs) have already channeled over Rs 25,500 crore into more than 1,370 startups across various sectors including agriculture, artificial intelligence, robotics, healthcare, and biotechnology, among others. This financial support has been instrumental in fostering a robust foundation for India’s venture capital ecosystem.
The Empowered Committee overseeing the Startup India FoF 2.0 will offer guidance and direction, while the recent expansion of criteria for recognizing entities as startups, doubling the turnover threshold to Rs 200 crore, reflects the government’s commitment to fostering a thriving startup ecosystem in the country.
