Why in news?
The Union Cabinet has launched Startup India Fund of Funds 2.0, a second phase of the government’s flagship venture capital programme. With a corpus of ₹10,000 crore, the new fund seeks to stimulate innovation in deep‑technology and manufacturing startups and strengthen India’s domestic venture capital ecosystem.
Background
The original Fund of Funds for Startups (FFS) was set up in 2016 under the Startup India initiative. Managed by SIDBI, it invests in SEBI‑registered venture capital funds, which in turn invest in early‑stage startups. The first phase supported over 1,300 startups and catalysed investments across sectors such as fintech, agritech, and biotechnology. Building on this success, Fund of Funds 2.0 aims to expand support to deep‑tech areas critical to India’s economic transformation.
Objectives and features
- Expanding the corpus: A ₹10,000 crore fund will be disbursed over several years to venture capital funds investing in Indian startups.
- Focus on deep tech: Priority will be given to startups working in advanced manufacturing, artificial intelligence, semiconductor design, and other high‑technology fields.
- Early‑stage support: The fund emphasises seed and early‑stage investments, helping startups bridge the “valley of death” between idea and commercialisation.
- Mobilising private capital: By providing anchor investments, the fund aims to crowd in domestic and global investors and strengthen the venture capital ecosystem in India.
- Long‑term vision: The initiative aligns with the government’s “Viksit Bharat @ 2047” vision of making India a developed nation by the centenary of independence.
Expected impact
- Boosting innovation: Increased funding will support research‑intensive startups and help India build capabilities in strategic sectors.
- Job creation: Startups are significant drivers of employment; the fund will help create high‑skilled jobs in technology and manufacturing.
- Strengthening the VC ecosystem: Domestic venture funds will gain more resources, enabling them to compete globally and reduce dependence on foreign capital.
Source: Press Information Bureau
