Union Cabinet Approves ₹10,000 Crore Startup India Fund of Funds 2.0 to Boost Innovation and Venture Capital

In a major boost to India’s entrepreneurial landscape, the Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the Startup India Fund of Funds 2.0 (FFS 2.0) with a corpus of ₹10,000 crore. The initiative is designed to further mobilise venture capital for the country’s growing startup ecosystem, building on the success of the first version of the Fund of Funds for Startups (FFS 1.0).

According to the Cabinet Secretariat, FFS 2.0 is intended to accelerate the next phase of India’s startup journey by mobilising long-term domestic capital, strengthening the venture capital ecosystem, and supporting innovation-led entrepreneurship across the nation. The scheme aligns with India’s ambition of emerging as a global hub for technology and innovation.

Since the launch of the Startup India initiative in 2016, India’s startup ecosystem has seen exponential growth, rising from fewer than 500 startups to over 200,000 government-recognised startups. FFS 1.0, with its ₹10,000 crore corpus, played a critical role in filling funding gaps and catalysing the domestic venture capital market. The fund supported 145 Alternative Investment Funds (AIFs), which have collectively invested over ₹25,500 crore in more than 1,370 startups spanning sectors such as agriculture, artificial intelligence, robotics, automotive, clean technology, consumer goods, e-commerce, education, fintech, food and beverages, healthcare, manufacturing, space tech, and biotechnology.

FFS 1.0 notably nurtured first-time founders, encouraged private capital inflows, and laid the foundation for a robust venture capital ecosystem. Building on this, FFS 2.0 is designed with a targeted, segmented approach to support deep-tech and tech-driven innovative manufacturing. The fund will prioritise high-tech breakthroughs that require patient, long-term capital, providing a safety net for early-stage founders and reducing failures caused by funding shortages.

Additionally, FFS 2.0 aims to encourage innovation beyond major metropolitan areas, ensuring that entrepreneurial potential thrives across India. By addressing high-risk capital gaps and directing resources to strategic sectors, the fund is expected to enhance self-reliance, boost economic growth, and create high-quality employment opportunities.

Aligned with the vision of Viksit Bharat @ 2047, FFS 2.0 underscores the Government’s commitment to empowering entrepreneurs, promoting innovation, and positioning India as a global innovation leader. By supporting startups that build globally competitive technologies and solutions, the fund is poised to play a transformative role in India’s economic trajectory and innovation-driven growth agenda.

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