Startup India Fund of Funds 2.0 launched by government to deepen startup financing ecosystem as India pushes aggressively on electronics manufacturing through PLI schemes and the semiconductor mission.
The Government of India has notified the Startup India Fund of Funds 2.0 (FoF 2.0) with a corpus of ₹100 billion to improve access to capital for startups, particularly in emerging and high-impact sectors. It will also encourage stronger participation from domestic investors.
A large part of this flow is expected to benefit deep tech, electronics, semiconductor design, and technology-led manufacturing startups where India is currently trying to reduce import dependence and build domestic capability.
Startups working in embedded systems, IoT devices, component manufacturing, PCB design, and even fabless semiconductor models could see improved funding access.
The new fund builds on the progress made under the earlier Fund of Funds for Startups (FFS 1.0), launched in 2016 as part of the Startup India Action Plan.
That programme helped address early-stage funding gaps and brought more institutional capital into the ecosystem.
With FoF 2.0, the government is now looking to deepen this effort by focusing on specialised and innovation-driven segments.
Under the scheme, capital will be deployed through SEBI-registered Alternative Investment Funds (AIFs), which will further invest in startups recognised by the government.
The priority areas include deep tech startups, early growth-stage companies backed by smaller AIFs, and technology-led manufacturing ventures.
At the same time, the structure allows flexibility to support startups across sectors and stages based on evolving market opportunities.
A structured selection process will be followed to ensure transparency. A Venture Capital Investment Committee (VCIC), comprising experienced industry professionals, will evaluate and shortlist AIFs.
Additionally, an Empowered Committee will oversee implementation and monitor performance. The framework also includes provisions for co-investment by the government along with institutional investors, which is expected to enhance investor confidence and improve capital efficiency.
The Department for Promotion of Industry and Internal Trade will issue detailed operational guidelines, while the Small Industries Development Bank of India has been designated as the primary implementation agency. Another domestic agency is also expected to be appointed to support execution.
Source: Gazette Notification
