Source: HT
Subject: Government Schemes
Context: The Union Cabinet has approved the Startup India Fund of Funds 2.0 (FoF 2.0) with a ₹10,000 crore corpus to mobilise venture capital for India’s startup ecosystem.
About Startup India Fund of Funds 2.0:
What it is?
- Startup India FoF 2.0 is a ₹10,000 crore government-backed fund designed to mobilise long-term domestic capital by investing in Alternative Investment Funds (AIFs), which in turn invest in startups.
Established in:
- Approved in 2026 by the Union Cabinet.
- Launched under the broader Startup India initiative.
- Builds on the earlier Fund of Funds for Startups (FFS 1.0) launched in 2016.
Aim:
- To accelerate the next phase of India’s startup growth.
- To strengthen the domestic venture capital ecosystem.
- To support innovation-led, technology-driven entrepreneurship.
- To reduce early-stage funding gaps and high-risk capital constraints.
Key Features:
- ₹10,000 crore Corpus: Dedicated government-backed capital to catalyse venture funding.
- Targeted Segmented Funding: Focus on deep-tech and innovative manufacturing sectors.
- Support to Early-Growth Startups: Reduces early-stage failures due to capital shortages.
- Pan-India Investment Reach: Encourages funding beyond major metro cities.
- High-Risk Capital Gap Bridging: Channels funds to priority and strategic sectors.
- Strengthening Domestic VC Base: Supports especially smaller AIFs to deepen local capital markets.
- FoF Model Structure: Invests in SEBI-registered AIFs rather than directly in startups.
Significance:
- Builds on FFS 1.0, which committed ₹10,000 crore to 145 AIFs investing ₹25,500+ crore in 1,370+ startups.
- Promotes deep-tech capabilities in AI, robotics, biotech, clean-tech and advanced manufacturing.
- Enhances India’s economic resilience and innovation competitiveness.
