Cabinet approves Rs. 10,000 crore Startup India Fund of Funds 2.0 to accelerate innovation-led growth
NEW DELHI: The Union Cabinet chaired by Narendra Modi has approved the establishment of Startup India Fund of Funds 2.0 with a corpus of Rs. 10,000 crore to mobilise venture capital for the country’s startup ecosystem.
The scheme aims to accelerate the next phase of India’s startup journey by mobilising long-term domestic capital, strengthening the venture capital ecosystem, and supporting innovation-led entrepreneurship across sectors.
Launched under the Startup India initiative in 2016, the programme has driven significant expansion of the ecosystem. India has grown from fewer than 500 startups in 2016 to over 2 lakh startups recognised by the Department for Promotion of Industry and Internal Trade, with 2025 recording the highest-ever annual registrations.
Building on Fund of Funds for Startups 1.0
Startup India Fund of Funds 2.0 follows the performance of the Fund of Funds for Startups 1.0, launched in 2016 to address funding gaps and catalyse the domestic venture capital market.
Under the first phase, the entire Rs. 10,000 crore corpus was committed to 145 Alternative Investment Funds. These funds have invested over Rs. 25,500 crore in more than 1,370 startups across sectors including agriculture, artificial intelligence, robotics, automotive, clean technology, consumer services, e-commerce, education, fintech, food and beverages, healthcare, manufacturing, space technology and biotechnology.
The first phase played a key role in supporting first-time founders, crowding in private capital and laying the foundation for a robust venture capital ecosystem.
Targeted support under 2.0
Startup India Fund of Funds 2.0 will adopt a segmented funding approach with a focus on deep technology and tech-driven innovative manufacturing that require patient, long-term capital.
The fund will also prioritise early-growth stage founders to reduce failures caused by funding gaps. It seeks to expand investment beyond major metropolitan centres to ensure broader national reach and support high-risk, priority sectors linked to self-reliance and economic growth.
The scheme is also designed to strengthen India’s domestic venture capital base, particularly smaller funds, to deepen the investment landscape.
The new fund is expected to contribute to innovation-led growth by supporting startups building globally competitive technologies, products and solutions. It aims to enhance economic resilience, boost manufacturing capabilities, generate high-quality jobs and position India as a global innovation hub, aligned with the national vision of Viksit Bharat @ 2047.
