Union Cabinet approves Startup India Fund of Funds 2.0

THe unification storage locker, chaired by undercoat government minister Narendra Modi, has sanctioned ₹10,000 crore Startup India Fund of Funds 2.0 to further facilitate mobilising venture capital for the country’s startup ecosystem after the success of the first version of Fund of Funds for Startups (FFS 1.0).“The scheme is designed 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 country,” a statement issued on Saturday by the Cabinet secretariat after the meeting said.Launched under the Startup India initiative, FFS 2.0 builds on nearly a decade of sustained efforts to make the country one of the world’s leading startup nations, it said. Since the launch of Startup India in 2016, India’s startup ecosystem has grown from less than 500 startups to over 200,000 government-recognised startups, it added.The FFS 2.0 is building upon the success of the FFS 1.0, the statement said. FFS 1.0, which was launched in 2016 to address funding gaps and catalyse the domestic venture capital market for startups. Under FFS 1.0, the entire corpus of ₹10,000 crore has been committed to 145 Alternative Investment Funds (AIFs).Such supported AIFs have invested over ₹25,500 crore in more than 1,370 startups across the country in sectors such as agriculture, artificial intelligence, robotics, automotive, clean tech, consumer goods & services, e-commerce, education, fintech, food & beverages, healthcare, manufacturing, space tech, and biotechnology, among others, the statement said.FFS 1.0 played a pivotal role in nurturing first-time founders, crowding in private capital, and helping build a strong foundation for India’s venture capital ecosystem, it said.The first phase of the FFS 2.0 is designed to take Indian innovation to the next level. The new fund will have a targeted, segmented funding approach to support deep tech and tech-driven innovative manufacturing. It will also prioritise breakthroughs in high-tech areas that require patient, long-term capital, the statement said.Other features of the latest version of the scheme include empowering early-growth stage founders, providing a safety net for new and innovative ideas, and reducing early-stage failures caused by a lack of funding.The fund will be encouraging investment beyond major metros so that the innovation thrives in every corner of the country, the statement said. It is designed to address high-risk capital gaps, directing greater capital to priority areas that are important for self-reliance and boosting economic growth. “It is expected to play a pivotal role in shaping India’s economic trajectory, leading to transformational impact,” the statement said.FFS 2.0 is expected to play a critical role in advancing India’s innovation-led growth agenda. By supporting startups that build globally competitive technologies, products, and solutions, the Fund will contribute to strengthening India’s economic resilience, boosting manufacturing capabilities, generating high-quality jobs, and positioning India as a global innovation hub, the statement said.“Aligned with the national vision of Viksit Bharat @ 2047, the Fund represents the Government’s continued commitment to empowering entrepreneurs, fostering innovation, and unlocking the full potential of India’s startup ecosystem.”