Centre notifies Rs 10,000 crore Startup India Fund of Funds 2.0 to spur deep tech, early-stage capital

New Delhi has notified the Startup India Fund of Funds 2.0 (FoF 2.0), a Rs 10,000 crore initiative intended to expand access to capital for emerging businesses and accelerate the country’s innovation ecosystem. Building on the Fund of Funds for Startups launched in 2016, the new scheme targets persistent funding gaps while encouraging the flow of domestic venture capital into high-potential sectors.

The corpus will be deployed through commitments to eligible Alternative Investment Funds (AIFs) over the course of the 16th and 17th Finance Commission cycles. According to the announcement, FoF 2.0 is expected to channel investments into priority areas including deep technology ventures, early-stage startups backed by smaller funds, and innovation-led manufacturing enterprises.

It is designed to support a wider range of startups across sectors and growth stages, reflecting a more flexible and inclusive investment approach. To ensure transparency and rigour in allocation, a Venture Capital Investment Committee (VCIC) comprising experienced members from the startup ecosystem will oversee the selection of AIFs.

An Empowered Committee will monitor implementation and performance, and built-in safeguards will govern co-investments by public and institutional stakeholders. Operational guidelines for the scheme, along with details of the VCIC, will be issued by the Department for Promotion of Industry and Internal Trade.

The Small Industries Development Bank of India has been designated as the primary implementation agency and will begin rolling out the scheme immediately, with plans to onboard an additional domestic agency. By investing in SEBI-registered AIFs that back government-recognised startups, FoF 2.0 aims to catalyse innovation, support job creation, and enhance India’s manufacturing and technological capabilities.