February 16, 2026
The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the Startup India Fund of Funds 2.0 with a corpus of Rs 10,000 crore. The initiative is designed to mobilize long-term domestic venture capital and strengthen India’s startup ecosystem. It focuses on supporting deep tech startups, innovative manufacturing ventures, and early-growth businesses that require patient funding.
The government views innovation-driven entrepreneurship as a key engine for economic growth. The fund aligns with the national vision of Viksit Bharat 2047 and aims to transform India into a global hub for technology, manufacturing, and enterprise. The scheme will also encourage funding to startups in tier-2 and tier-3 cities, ensuring that innovation reaches beyond traditional metropolitan centers.
Building on a Strong Foundation
The Startup India Fund of Funds 2.0 builds on the success of the original Fund of Funds for Startups launched in 2016. That initiative committed its entire Rs 10,000 crore corpus to 145 Alternative Investment Funds. These funds invested over Rs 25,500 crore across more than 1,370 startups in areas including robotics, clean technology, biotechnology, fintech, space technology, healthcare, and manufacturing.
FFS 1.0 was instrumental in supporting first-time founders, bridging funding gaps in early stages, and attracting private investment into India’s startup ecosystem. It helped establish India as one of the largest startup nations in the world.
Strategic Focus of Fund of Funds 2.0
The new fund has a more focused approach. It prioritizes:
- Deep tech startups that require long-term investment in areas such as robotics, advanced manufacturing, clean energy, and semiconductor design
- Early-stage funding India to support startups at critical growth stages and reduce risks associated with limited capital
- Nationwide investment beyond major cities, promoting innovation in smaller towns and regions
- Strengthening domestic venture capital India, especially smaller funds that are vital for nurturing emerging startups
- Supporting sectors that contribute to economic resilience and long-term competitiveness
Promoting Innovation-Driven Entrepreneurship
Since the launch of the Startup India initiative, the country has seen remarkable growth in startups. From fewer than 500 recognized startups in 2016, India now has over 2 lakh DPIIT-recognized ventures. The year 2025 recorded the highest annual startup registrations, reflecting a rapidly maturing ecosystem supported by government programs and private investment.
FoF 2.0 will provide a platform for innovation-driven entrepreneurship by enabling startups to develop globally competitive products and technologies. The initiative is expected to create quality employment, enhance manufacturing capabilities, and strengthen India’s position as a global innovation center.
Benefits for Startups and Investors
The fund offers several benefits:
- Startups gain access to patient, long-term capital that reduces the risk of failure and allows for sustainable growth
- Investors are encouraged to contribute alongside government-backed funds, improving the domestic venture capital landscape
- The economy benefits from stronger manufacturing capabilities, strategic technological development, and employment generation
Looking Ahead
The approval of the Startup India Fund of Funds 2.0 demonstrates the government’s commitment to fostering a thriving startup ecosystem in India. By providing funding to deep tech startups and supporting early-stage ventures across the country, the fund will accelerate innovation and strengthen domestic venture capital India.
The initiative ensures that India continues to grow as a global innovation hub and supports the national ambition of Viksit Bharat 2047. By bridging funding gaps and promoting innovation-driven entrepreneurship, the FoF 2.0 is poised to play a transformative role in India’s economic development and global competitiveness.
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