India has approved the Startup India Fund of Funds 2.0 with a corpus of Rs. 10,000 crore to expand venture capital support for the startup ecosystem. The scheme is aimed at mobilising long-term domestic capital, strengthening the venture capital market, and backing innovation-led entrepreneurship across the country. It builds on the earlier Fund of Funds for Startups, which helped deepen India’s startup financing base since 2016.
What the Scheme Aims to Do
The new fund is designed to address funding gaps in the startup ecosystem. It will support early-stage and growth-stage ventures that need patient capital. The focus is on sectors that require long gestation periods and higher risk appetite. The scheme also seeks to widen startup finance beyond major urban centres.
Background of Startup India
Startup India was launched in 2016 to promote entrepreneurship and innovation. Since then, India’s startup base has expanded sharply, with more than 2 lakh DPIIT-recognised startups. The year 2025 has recorded the highest annual startup registrations so far. This growth reflects stronger policy support, wider investor participation, and greater acceptance of entrepreneurship as a career path.
Performance of Fund of Funds 1.0
The earlier Fund of Funds for Startups had a corpus of Rs. 10,000 crore. The full amount has been committed to 145 Alternative Investment Funds. These funds have invested over Rs. 25,500 crore in more than 1,370 startups. The supported startups operate in sectors such as artificial intelligence, robotics, clean technology, fintech, healthcare, space technology, biotechnology, agriculture, and manufacturing.
Key Features and Expected Impact
- The scheme will give priority to deep tech and tech-driven manufacturing.
- It will support first-time founders and early-growth ventures.
- It aims to strengthen smaller domestic venture capital funds.
- It encourages investment in non-metro regions.
- It is aligned with Viksit Bharat @ 2047 and India’s innovation-led growth goals.