The Government of India has officially notified the ₹10,000 crore Startup India Fund of Funds (FoF 2.0), aimed at boosting access to venture and growth capital for deep tech startups, early stage companies, and tech driven manufacturing ventures.
The new fund builds on the success of the earlier Fund of Funds for Startups (FFS 1.0), launched in 2016 under the Startup India programme. Managed by the Small Industries Development Bank of India under the Department for Promotion of Industry and Internal Trade (DPIIT), FFS 1.0 operates as an “investor for investors,” deploying capital into SEBI registered Alternative Investment Funds (AIFs). It has supported more than 1,370 startups to date.
FoF 2.0 will follow a similar structure, investing in SEBI-registered AIFs that, in turn, deploy capital into government recognised startups through equity and equity linked instruments.
Focus Areas
The newly notified fund will be structured across four key segments:
- Deep tech startups
- Micro VCs backing early growth stage startups
- Tech driven manufacturing ventures
- Sector agnostic investment funds
This segmentation reflects the government’s intent to channel capital into high impact and innovation led sectors while strengthening early stage funding ecosystems.
Implementation Framework
Detailed operational guidelines will be issued by DPIIT, covering:
- Eligibility criteria for funds
- Selection and evaluation processes
- Disbursal mechanisms
- Monitoring and reporting frameworks
A dedicated committee chaired by the DPIIT Secretary will oversee implementation and performance tracking of the fund.
Strategic Significance
FoF 2.0 is expected to play a critical role in addressing funding gaps in India’s startup ecosystem, particularly in capital intensive and innovation heavy sectors like deep tech and manufacturing. By leveraging AIFs as intermediaries, the government aims to crowd in private capital while ensuring efficient allocation of funds.
The move signals a continued push to strengthen India’s startup ecosystem and position it as a global hub for innovation and technology-led growth.
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