Our Bureau
New Delhi
The Union government has approved the second tranche of the Startup India Fund of Funds Scheme, dubbed Fund of Funds 2.0, with a fresh corpus of Rs 10,000 crore, in a bid to deepen capital access for early‑stage and deep‑tech startups across the country. Prime Minister Narendra Modi cleared the proposal on his first day at the newly inaugurated “Seva Teerth” office complex, underscoring the government’s focus on innovation‑driven growth and youth entrepreneurship.
The Fund of Funds 2.0 is designed to act as a catalytic capital vehicle, encouraging private venture capital and institutional investors to back high‑potential startups in sectors such as deep technology, advanced manufacturing, and next‑generation digital solutions. The scheme will continue to operate through SEBI‑registered Alternative Investment Funds (AIFs), which will receive capital from the government‑backed fund and then make equity and equity‑linked investments in eligible Indian startups.
The Small Industries Development Bank of India (SIDBI) will administer the programme, selecting qualifying AIFs and overseeing deployment of funds, while the Department for Promotion of Industry and Internal Trade (DPIIT) will serve as the monitoring agency. AIFs participating in the scheme are required to invest at least twice the amount of capital they receive from the Fund of Funds, amplifying the multiplier effect across the startup ecosystem.
The original Fund of Funds for Startups, launched in 2016 with a Rs 10,000‑crore corpus, has already channelled capital into thousands of DPIIT‑recognised startups, many of which are in early‑stage and high‑risk technology segments. With over two lakh entities currently recognised as startups under the Startup India initiative, the new tranche is expected to further strengthen India’s position as one of the world’s largest startup ecosystems and spur job creation in the tech‑enabled economy.
