THEBUSINESSBYTES BUREAU
NEW DELHI, FEBRUARY 14, 2026
In a significant push to India’s innovation-driven economy, the Union
Cabinet chaired by Prime Minister Narendra Modi has approved the creation of
the Startup India Fund of Funds 2.0 with a corpus of ₹10,000
crore to mobilise venture capital for the country’s rapidly expanding startup
ecosystem.
The new scheme is aimed at accelerating the next phase of India’s startup
growth by unlocking long-term domestic capital, deepening the venture capital
market and supporting innovation-led entrepreneurship across sectors and
geographies. The initiative builds on nearly a decade of the Startup India
programme, under which the number of startups has surged from fewer than 500 in
2016 to more than two lakh DPIIT-recognised ventures, with 2025 recording the
highest-ever annual registrations.
Startup India FoF 2.0 follows the strong performance of the Fund of Funds
for Startups (FFS 1.0), launched in 2016 to bridge critical funding gaps. Under
the first phase, the entire ₹10,000 crore corpus was committed to 145
Alternative Investment Funds, which together invested over ₹25,500 crore in
more than 1,370 startups spanning agriculture, artificial intelligence, robotics, automotive, clean technology, fintech,
healthcare, manufacturing, space technology and biotechnology, among others.
The programme played a key role in nurturing first-time founders, crowding in
private capital and laying the foundation for a robust domestic venture capital
ecosystem.
While FFS 1.0 focused on building the ecosystem, the second phase will
adopt a more targeted and segmented funding strategy. It will prioritise
deep-tech and technology-driven manufacturing that require patient capital,
support early-growth stage founders to reduce failures due to funding
constraints, and expand investment beyond major metropolitan hubs to promote
innovation across the country. The fund is also designed to address high-risk
capital gaps in priority sectors critical for self-reliance and economic
growth, while strengthening smaller domestic venture funds.
The government expects the new fund to play a transformative role in shaping India’s economic trajectory by enabling startups to develop globally competitive technologies, products and solutions. The initiative is projected to enhance manufacturing capabilities, create high-quality jobs, boost economic resilience and position India as a leading global innovation hub.
Aligned with the vision of Viksit Bharat @ 2047, Startup India Fund of Funds 2.0 underscores the Centre’s continued commitment to empowering entrepreneurs, fostering innovation and unlocking the full potential of the country’s startup ecosystem.
