Startup India Fund of Funds 2.0 (FoF 2.0)

  • 15 Apr 2026

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In a significant move to bolster India's entrepreneurial landscape, the Government of India officially notified the Startup India Fund of Funds 2.0 (FoF 2.0). With a massive corpus of ?10,000 crore, this second iteration aims to bridge funding gaps and catalyze domestic capital for the next generation of Indian innovators.

Background and Evolution

FoF 2.0 is the successor to the original Fund of Funds for Startups (FFS 1.0), which was launched in 2016 under the Startup India Action Plan. While the first phase focused on establishing the startup culture, the 2.0 version is designed to scale the ecosystem, particularly in capital-intensive and frontier technology sectors.

Core Objective

The primary goal is to mobilize venture and growth capital from domestic sources. By providing a "cornerstone" government commitment, the fund encourages private institutional investors to contribute, thereby reducing the Indian startup ecosystem's over-reliance on foreign capital.

Operational Mechanism: How it Works

The Startup India FoF 2.0 does not invest directly in startups. Instead, it follows a "Fund of Funds" model:

  1. Investment in AIFs: The government contributes capital to the corpus of SEBI-registered Alternative Investment Funds (AIFs).
  2. Downstream Investment: These AIFs then identify and invest in individual entities recognized as 'startups' by the Central Government.
  3. Implementation Agencies:SIDBI (Small Industries Development Bank of India) is the primary agency to operationalize the scheme. Notably, provisions exist to appoint an additional domestic implementing agency to expand the reach.

Key Features and Strategic Focus

Feature

Details

Total Corpus

?10,000 Crore

Time Frame

Spread across the 16th and 17th Finance Commission cycles.

Nodal Dept.

Department for Promotion of Industry and Internal Trade (DPIIT).

Priority Segments

Deep Tech, Innovative Manufacturing, and Early Growth-stage startups.

Flexibility

Sector and stage agnostic; allows for larger corpus and longer-duration AIFs for capital-intensive sectors.

Governance and Oversight

To ensure transparency and high-quality fund selection, a robust three-tier governance structure has been established:

  • Venture Capital Investment Committee (VCIC): Composed of industry veterans, the VCIC undertakes the screening and selection of eligible AIFs.
  • Empowered Committee (EC): This body provides high-level monitoring and oversight of the scheme's implementation and performance.
  • Umbrella Framework: Includes provisions for co-investment by the government and institutional investors, backed by strict governance safeguards.