The Startup India Fund of Funds 2.0 (FoF 2.0) is a government-backed initiative launched with a corpus of ₹10,000 crore to strengthen India’s startup ecosystem by improving access to long-term venture capital. It is designed as a successor to the original Fund of Funds for Startups (FFS 1.0), with a stronger focus on deep-tech, innovation-led manufacturing, and early-growth stage companies.
Unlike direct government funding to startups, the scheme operates through a “fund of funds” model. Under this structure, the government does not invest directly in startups but instead contributes capital to SEBI-registered Alternative Investment Funds (AIFs). These AIFs, in turn, invest in DPIIT-recognised startups, often alongside private investors, helping multiply the overall investment impact in the ecosystem.
The Small Industries Development Bank of India (SIDBI) acts as the primary operating agency for the scheme, responsible for channeling funds to selected AIFs and ensuring structured deployment. These “daughter funds” are expected to raise additional private capital, thereby creating a multiplier effect and expanding the total pool of venture funding available to startups across India.
The scheme particularly targets sectors that require patient and long-term capital, such as artificial intelligence, robotics, biotechnology, space technology, and advanced manufacturing. It also aims to address funding gaps faced by early-growth startups, especially those in Tier-2 and Tier-3 cities, helping decentralize India’s innovation ecosystem beyond major metro hubs.
Overall, Startup India Fund of Funds 2.0 is intended to strengthen domestic venture capital capacity, reduce reliance on foreign funding, and support high-risk, high-impact innovation. By leveraging institutional funds and private capital together, it aims to accelerate India’s transition into a more deep-tech-driven and innovation-led startup economy.
