The Government of India has approved a fresh Rs 10000 crore allocation under Startup India Fund of Funds 2.0, reinforcing its commitment to strengthening the country’s vibrant startup ecosystem. The new fund builds upon the earlier Startup India initiative and aims to catalyse innovation, attract private capital and provide much needed growth support to emerging enterprises across sectors.
The Fund of Funds model does not invest directly into startups. Instead, it channels capital into SEBI registered Alternative Investment Funds which in turn invest in promising startups. This structure ensures professional fund management, diversified risk and better capital allocation across industries and stages of business growth. The fresh corpus is expected to boost access to early and growth stage funding, particularly for startups operating in technology driven and strategically important sectors.
The first Startup India Fund of Funds played a significant role in unlocking venture capital for Indian entrepreneurs. With Fund of Funds 2.0, the government intends to deepen its impact by encouraging more domestic investment participation and reducing reliance on foreign capital. The renewed focus is also aligned with India’s ambition of becoming a global innovation hub and supporting self reliance in critical industries.
The Department for Promotion of Industry and Internal Trade under the Ministry of Commerce and Industry will continue to anchor the initiative, while the Small Industries Development Bank of India is likely to manage the fund deployment process as it did earlier. The move is expected to accelerate funding for startups working in areas such as deep tech, artificial intelligence, clean energy, fintech, manufacturing and other sunrise sectors.
The approval comes at a time when global funding conditions have tightened and many startups are facing valuation pressures and slower capital inflows. By infusing fresh public capital into the ecosystem, the government aims to stabilise funding cycles and encourage long term investment commitments from institutional investors.
Industry experts believe that the new Rs 10000 crore allocation will not only strengthen early stage funding pipelines but also improve confidence among venture capital firms and entrepreneurs. It signals continuity in policy support and underlines the government’s long term strategy of fostering entrepreneurship, job creation and technological advancement.
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