The Union Cabinet has approved the creation of Startup India Fund of Funds 2.0 (FOF 2.0) with a corpus of Rs 10,000 crore to support startups through venture capital funds.
The new fund will build on the earlier Fund of Funds for Startups (FFS) launched in 2016. Under the first fund, Rs 10,000 crore was committed to 145 alternative investment funds, which together invested over Rs 25,000 crore in more than 1,300 startups across sectors.
FOF 2.0 will continue to invest in SEBI-registered alternative investment funds, which will in turn deploy capital into startups. The initiative aims to address funding gaps, especially in early-growth and technology-driven sectors.
The new fund will focus on areas such as deep tech, manufacturing, and innovation-led businesses. It also aims to strengthen the domestic venture capital ecosystem and expand capital access beyond major metro cities.
As per the report, India currently has over 2 lakh recognised startups, compared to fewer than 500 in 2016 when the Startup India initiative was launched.
