Cabinet approves Startup India Fund of Funds 2.0 to Mobilize Venture Capital for India’s Startup Ecosystem

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 fostering innovation-led entrepreneurship, particularly in emerging and strategic sectors.

Strengthening India’s Startup Ecosystem

Launched under the Startup India initiative, Startup India FoF 2.0 builds on nearly a decade of sustained efforts to position India among the world’s leading startup nations. Since the launch of Startup India in 2016, the ecosystem has grown from fewer than 500 startups to over 2 lakh DPIIT-recognised startups, with 2025 recording the highest ever annual startup registrations.

Building on the Success of Fund of Funds for Startups 1.0

Startup India FoF 2.0 follows the strong performance of the Fund of Funds for Startups (FFS 1.0), launched in 2016 to address funding gaps and catalyse the domestic venture capital market.

Under FFS 1.0, the entire ₹10,000 crore corpus was committed to 145 Alternative Investment Funds (AIFs). These AIFs have invested over ₹25,500 crore in more than 1,370 startups across sectors including agriculture, artificial intelligence, robotics, automotive, clean technology, consumer goods and services, e-commerce, education, fintech, food and beverages, healthcare, manufacturing, space technology, and biotechnology.

FFS 1.0 played a crucial role in nurturing first-time founders, crowding in private capital, and laying a strong foundation for India’s venture capital ecosystem.

Key Features of Startup India FoF 2.0

While the first phase focused on ecosystem building, Startup India FoF 2.0 is designed to take Indian innovation to the next level through a targeted and segmented funding approach, with emphasis on:

• Deep tech and tech-driven innovative manufacturing, supporting high-technology breakthroughs that require patient, long-term capital

• Early-growth stage startups, providing crucial support to reduce early-stage failures caused by funding constraints

• National reach, encouraging investments beyond major metropolitan centres to promote innovation across all regions

• Addressing high-risk capital gaps, especially in priority sectors critical for self-reliance and economic growth

• Strengthening the domestic venture capital base, particularly by supporting smaller and emerging funds

Driving Innovation-Led Growth

Startup India FoF 2.0 is expected to play a pivotal role in shaping India’s economic trajectory by supporting startups that develop globally competitive technologies, products, and solutions. The Fund will contribute to enhancing economic resilience, boosting manufacturing capabilities, generating high-quality employment, and positioning India as a global innovation hub.

Aligned with the national vision of Viksit Bharat @ 2047, the initiative underscores the Government’s continued commitment to empowering entrepreneurs, fostering innovation, and unlocking the full potential of India’s startup ecosystem.