The Government of India has officially launched the Startup India Fund of Funds 2.0 (FoF 2.0) with a total corpus of ₹10,000 crore. The initiative has been notified by the Department for Promotion of Industry and Internal Trade and aims to boost funding for startups across the country.
Instead of giving money directly to startups, the government will invest through Alternative Investment Funds (AIFs). This means the funds will be managed by professional investors who will then support startups. This structured approach is expected to make funding more effective and encourage more private investment in India’s startup ecosystem.
Focus on Deep-Tech and Growing Startups
FoF 2.0 will mainly support startups working in advanced and future-focused sectors. These include deep-tech, innovative manufacturing, and early-stage companies with high growth potential. Areas like artificial intelligence, machine learning, and new-age technologies are expected to benefit the most.
The main goal of the fund is to fill the funding gaps that many startups face, especially in their early and growth stages. The government also wants to encourage more domestic investment and reduce dependency on foreign funding. Overall, the initiative aims to support innovation and help India grow as a global startup hub.
Built on the Success of the 2016 Fund
This new fund builds on the earlier Fund of Funds for Startups (FFS 1.0), which was launched in 2016 under the Startup India initiative by Narendra Modi. The first fund was managed by the Small Industries Development Bank of India, which invested in different venture capital funds.
A special committee selected these venture funds, including experts like Mohandas Pai, Kiran Karnik, and Saurabh Srivastava. These funds then supported startups in sectors like fintech, healthcare, AI, IoT, and agriculture. With FoF 2.0, the government plans to improve and expand this model. By focusing on the right sectors and using a targeted approach, the new fund is expected to drive the next phase of startup growth in India.