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Govt approves Rs 10,000 crore FoF 2.0 scheme to support India’s startup ecosystem

16 Feb 2026 Evaluate

The government of India has approved the second part of the Fund of Funds (FoF 2.0) scheme with an outlay of Rs 10,000 crore under the Startup India initiative. The FoF 2.0 has been designed to continue the momentum of investments in startups, with an expanded scope over FFS 1.0 which was launched in 2016. The scheme is aimed at mobilising long-term domestic capital, strengthening the venture capital ecosystem, and supporting innovation-led entrepreneurship across the country. The FoF 2.0 is designed to take Indian innovation to the next level with a targeted, segmented funding approach to support deep tech and tech-driven innovative manufacturing. 

Under the part of the fund, the entire corpus of Rs 10,000 crore has been committed to 145 Alternative Investment Funds (AIFs). Such supported AIFs have invested over Rs 25,500 crore in more than 1,370 startups across the country in various sectors, such as agriculture, artificial intelligence, robotics, automotive, clean tech, consumer goods and services, e-commerce, education, fintech, food and beverages, healthcare, manufacturing, space tech, and biotechnology, amongst others. This fund played a key role in nurturing first-time founders, crowding in private capital, and helping build a strong foundation for India's venture capital ecosystem.

It will prioritise breakthroughs in high-tech areas that require long-term capital. The focus will also be on empowering early-growth stage founders to provide a safety net for new and innovative ideas, reducing early-stage failures caused by a lack of funding. Moreover, it will encourage investments beyond major metros so that innovation thrives in every corner of the country. The scheme will also address high-risk capital gaps and strengthen India's domestic venture capital base, particularly smaller funds, to further boost the domestic investment landscape. Startup India FoF 2.0 will have an Empowered Committee to provide guidance and directions.

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