The Department for Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce and Industry, has issued operational guidelines for the Startup India Fund of Funds 2.0 (FoF 2.0), with a corpus of Rs. 10,000 crore (US$ 1.08 billion). The framework is designed to streamline how capital is deployed, governed, and monitored, with the objective of improving the flow of funding into India’s growing startup ecosystem. Under this structure, investments will be routed through SEBI-registered Category I and Category II Alternative Investment Funds (AIFs), which will then channel capital into DPIIT-recognised startups.
The Small Industries Development Bank of India (SIDBI) has been designated as the initial implementation agency, tasked with selecting and overseeing AIFs to ensure effective fund management and compliance. DPIIT also plans to appoint an additional implementing agency to scale up operational capacity and broaden the fund’s reach. Rather than investing directly in startups, the FoF 2.0 will act as a catalytic pool to attract and mobilise private capital, strengthening India’s domestic venture capital ecosystem and reducing reliance on overseas funding sources.
The initiative is expected to prioritise sectors such as deep technology, innovation-led manufacturing, and early-stage ventures, while also improving access to finance for startups outside major metropolitan hubs. Overall, the Fund of Funds 2.0 aims to deepen India’s innovation ecosystem, improve capital availability at the early stage, and reinforce the country’s position as a global startup and technology hub.
