Startup India Fund of Funds 2.0: Expanding Access to Venture Capital
The Government of India has introduced the Startup India Fund of Funds 2.0 (FoF 2.0) with a corpus of ₹10,000 crore to strengthen access to venture capital across India’s startup ecosystem. Building on the earlier Fund of Funds framework, the scheme channels investments through SEBI-registered Alternative Investment Funds (AIFs), which in turn invest in recognised startups across sectors and stages.
The initiative focuses on addressing funding gaps in key areas such as deep technology, early-stage ventures, and innovation-driven manufacturing. A structured segmentation approach has been adopted to support AIFs targeting specific segments, including deep tech, early-stage startups, technology-led manufacturing, as well as sector-agnostic investments.
Key features of the scheme include:
- Segmented support for deep tech, early-stage and manufacturing-focused startups
- Strengthening of domestic venture capital availability through AIFs
- Support for larger fund sizes in capital-intensive sectors
- Provision for longer investment horizons for technologies with extended gestation periods
- Calibrated norms to enable wider participation of AIFs
Operational features of the scheme provide greater flexibility in fund structure and deployment, while maintaining a structured investment and monitoring framework.
The scheme will be implemented primarily through the Small Industries Development Bank of India (SIDBI), along with additional implementing agencies. Investment proposals from AIFs will be evaluated through a structured mechanism, with oversight by an Empowered Committee to ensure effective monitoring and governance.
Beyond capital mobilisation, the scheme also supports ecosystem development through mentorship, capacity building, and shared infrastructure, aimed at strengthening the overall startup environment.
Startup India FoF 2.0 is expected to enhance the availability of domestic risk capital, support the scaling of innovation-driven enterprises, and contribute to a more resilient and globally competitive startup ecosystem.
Source: Startup India