Startup India Fund of Funds 2.0
Why in News?
The Startup India Fund of Funds 2.0 (FoF 2.0) was approved by the Union Cabinet, chaired by Prime Minister Narendra Modi, marking a major step to boost India's startup ecosystem.
Key Information
- Total Corpus: ₹10,000 crore (sanctioned in the Union Budget 2025–26).
- Operating Model: It does not invest directly in startups. Instead, it contributes capital to SEBI-registered Alternative Investment Funds (AIFs), which then invest at least twice the government's contribution into eligible startups.
- Implementing Agency: Managed by the Small Industries Development Bank of India (SIDBI) under the oversight of the DPIIT.
- Priority Sectors:
- Deep Tech: AI, quantum computing, robotics, and biotechnology.
- Strategic Manufacturing: Semiconductors, space technology, and defence-linked innovation.
- Clean Energy: Climate tech and green transition solutions.
- Targeted Founders: Aims to provide a "safety net" for first-time founders and early-growth stage ventures to prevent failures due to lack of follow-on funding.
- Geographical Expansion: Explicitly encourages AIFs to fund startups beyond major metro hubs (Bengaluru, Delhi, Mumbai) to promote innovation in Tier-2 and Tier-3 cities.
- Legacy (FFS 1.0) Performance:
- Committed the entire ₹10,000 crore to 145 AIFs.
- Catalysed investments of over ₹25,500 crore in more than 1,370 startups.
- Aided in growing India's startup base from fewer than 500 in 2016 to over 2 lakh recognised entities by 2026.
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