The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the establishment of the Startup India Fund of Funds 2.0 (FoF 2.0) with a corpus of ₹10,000 crore to mobilise venture capital for the country’s rapidly expanding startup ecosystem.
The new fund aims to accelerate the next phase of India’s startup journey by mobilising long-term domestic capital, strengthening the venture capital landscape and supporting innovation-led entrepreneurship across sectors.
Launched under the Startup India initiative, FoF 2.0 builds on nearly a decade of efforts to position India among the world’s leading startup hubs. Since the launch of Startup India in 2016, the ecosystem has grown from fewer than 500 startups to more than 2 lakh startups recognised by the Department for Promotion of Industry and Internal Trade (DPIIT), with 2025 recording the highest-ever annual startup registrations.
The new scheme follows the success of the Fund of Funds for Startups (FFS 1.0), launched in 2016 to address funding gaps and catalyse domestic venture capital investments.
Under FFS 1.0, the entire ₹10,000 crore corpus was committed to 145 Alternative Investment Funds (AIFs), which have collectively invested over ₹25,500 crore in more than 1,370 startups across sectors such as artificial intelligence, robotics, clean technology, fintech, healthcare, manufacturing, biotechnology and space technology, among others.
The first phase played a key role in nurturing first-time founders and crowding in private capital to build a strong venture capital ecosystem.
Startup India FoF 2.0 adopts a targeted and segmented funding approach. It will prioritise deep tech and technology-driven innovative manufacturing ventures that require patient, long-term capital. The fund will also support early-growth stage startups to reduce failures caused by limited access to capital in the initial years.
The scheme aims to expand investment beyond major metropolitan centres to ensure that innovation thrives across the country. It will also address high-risk capital gaps in priority sectors critical to self-reliance and economic growth, while strengthening India’s domestic venture capital base, particularly smaller funds.
The Ministry of Commerce & Industry said the new fund is expected to play a critical role in advancing India’s innovation-driven growth agenda by supporting startups that develop globally competitive technologies, products and solutions.
The initiative is aligned with the government’s vision of Viksit Bharat @ 2047 and is expected to contribute to economic resilience, enhanced manufacturing capabilities, job creation and India’s emergence as a global innovation hub.
With the approval of Startup India FoF 2.0, the government has reaffirmed its commitment to empowering entrepreneurs and unlocking the full potential of India’s startup ecosystem.
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