Add Zee Business as a Preferred Source
Centre approves Rs 10,000 crore Startup India Fund of Funds 2.0 to boost venture capital
The Central Government has approved the establishment of 'Startup India Fund of Funds 2.0' with a total corpus of Rs 10,000 crore for mobilising venture capital for the country’s startup ecosystem, according to a notification issued by the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry.
)
Startup India Fund of Funds 2.0 will enable access to venture capital for startups across stages and sectors, similar to the earlier Fund of Funds for Startups. Image: AI-generated
Written By: ZeeBiz WebTeam
Updated: Mon, Apr 13, 2026
09:03 PM IST
09:03 PM IST
ZeeBiz WebDesk
The Central Government has approved the establishment of 'Startup India Fund of Funds 2.0' with a total corpus of Rs 10,000 crore for mobilising venture capital for the country’s startup ecosystem, according to a notification issued by the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry.
The scheme, to be known as 'Startup India Fund of Funds 2.0 (Startup India FoF 2.0)', will come into force from the date of the notification, with commitments to Alternative Investment Funds (AIFs) spread over the 16th and 17th Finance Commission cycles.
Startup India Fund of Funds 2.0 will enable access to venture capital for startups across stages and sectors, similar to the earlier Fund of Funds for Startups. It will also provide thrust to innovation-driven manufacturing, long gestation technologies, and support smaller venture capital funds focusing on early growth-stage startups.
TRENDING NOW
The structure of the scheme will continue to be along the lines of the Fund of Funds for Startups launched in 2016 under the Startup India Action Plan. The scheme will contribute to the corpus of SEBI-registered AIFs for investment in equity and equity-linked instruments of entities recognised as startups by the Central Government.
After raising funds from other investors to meet their target corpus, AIFs will evaluate startups for investments, which will take place in tranches over a period. These AIFs will draw funds from contributors, including Startup India FoF 2.0, and will mentor and nurture their investee startups before exit or sale of investments.
Distributions, including capital redeemed and returns earned, after utilisation of up to 5 per cent of returns for capacity building of the startup ecosystem, will be deposited back into the Consolidated Fund of India.
The scheme has an expanded scope with a segmented approach to target key areas. This includes support for AIFs focused on deep-tech startups, early-stage ventures through smaller funds, technology-driven manufacturing startups under the ‘Make in India’ initiative, and sector-agnostic investments.
Operational flexibilities will be incorporated to address the requirements of these segments. These include support for larger fund sizes in capital-intensive sectors, longer duration funds for startups with extended R&D cycles, higher contribution from the scheme in segments where private capital is limited, and moderation of investment multipliers to encourage wider participation.
The scheme also positions Startup India FoF 2.0 as an umbrella framework for co-investment or contribution of additional corpus by ministries, departments and institutional investors. It also provides for a strengthened monitoring and evaluation system through an Empowered Committee with inter-ministerial representation.
For implementation, the Small Industries Development Bank of India (SIDBI), which was the implementing agency for the earlier scheme, will continue in the same role. Additional domestic implementing agencies will also be selected.
These agencies will invite proposals from AIFs and carry out due diligence. A Venture Capital Investment Committee (VCIC), constituted by DPIIT and comprising industry representatives and experts, will consider and recommend proposals for funding under the scheme.
An Empowered Committee chaired by the Secretary, DPIIT, will oversee the implementation and performance of the scheme. The committee will include representatives from concerned ministries and departments, the National Startup Advisory Council, and members of the startup ecosystem.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.
RECOMMENDED STORIES
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
RELATED NEWS
India showcases 3 key objectives of upcoming 'AI Impact Summit' at Davos
Fintech firm Optimo Capital raises Rs 150 crore in Series A round
Fired from US remote job, Indian techie's venture hits Rs 44 lakh revenue in 6 months
"Laid off in 2 days after joining"; Reddit post raises concerns on startup work culture
Surat-based B2B textile manufacturing startup Fantail raises Rs 13.75 crore in seed round
