The Central Government, through the Department for Promotion of Industry and Internal Trade, has launched the ‘Startup India Fund of Funds 2.0’ with a corpus of ₹10,000 crore to boost venture capital investment in startups. The scheme aims to support innovation, especially in deep tech, early-stage startups, and technology-driven manufacturing, by contributing to SEBI-registered Alternative Investment Funds (AIFs). These AIFs will raise additional capital, invest in startups in tranches, and provide mentorship before exiting investments. The scheme introduces a segmented approach targeting deep tech, micro VCs, manufacturing, and sector-agnostic startups, along with operational flexibility and increased funding support. Up to 5% of returns will be used for ecosystem development, with the remainder credited to the Consolidated Fund of India. The implementation will be led by Small Industries Development Bank of India and other agencies, with oversight by an Empowered Committee ensuring effective monitoring and governance.
MINISTRY OF COMMERCE AND INDUSTRY
(Department for Promotion of Industry and Internal Trade)
(STARTUP INDIA SECTION)
NOTIFICATION
New Delhi, the 13th April, 2026
S.O. 1860(E).—The Central Government has approved the establishment of ‘Startup India Fund of Funds 2.0’ with a total corpus of Rs. 10,000 crore for the purpose of mobilizing venture capital for the startup ecosystem of the country.
The Scheme shall be known as the ‘Startup India Fund of Funds 2.0 (Startup India FoF 2.0)’. It shall come into force from date of this notification, with commitments to AIFs spread over the 16th and 17th Finance Commission Cycles.
1. Objectives
1.1 Startup India Fund of Funds 2.0 will enable access to venture capital for startups across stages and sectors as was in the case of Fund of Funds for Startups 1.0 while providing thrust to innovation driven manufacturing and development of long gestation technologies, as well as, to support development of smaller Venture Capital funds with focus on investments in early growth stage startups, nurturing innovative ideas.
1.2 The broad structure for Startup India FoF 2.0 will continue to be the one adopted for the Fund of Funds for Startups launched in 2016 as part of the Startup India Action Plan. The Scheme will contribute to the corpus of SEBI-registered Alternative Investment Funds (AIFs) for investing in equity and equity-linked instruments of entities recognised as ‘startups’ by the Central Government.
1.3 After raising funds from other investors, to meet the target corpus amount, AIFs will evaluate startups for investments, which will take place in tranches over a period. Accordingly, AIFs will draw funds from contributors including Startup India FoF 2.0 in tranches for making the investments. Post investments, the supported AIFs will mentor and nurture their investee startups before exit/sale of investments.
1.4 Distributions (both capital redeemed and returns earned) from Startup India FoF 2.0, net-off utilisation of up to 5% of the returns for purpose of capacity building of startup ecosystem, will be deposited back to the Consolidated Fund of India (CFI).
1.5 Startup India Fund of Funds 2.0 will have an expanded scope with:
a. Segmented approach to target key segments for real innovation:- a) Segment-1: AIFs supporting deep tech i.e., startups engaged in developing novel solutions addressing complex problems that involve longer R&D cycles, higher costs; b) Segment-2: Smaller AIFs (Micro VCs) supporting early growth stage startups i.e., startups which are in the early phases of developing a technology, product or service, to provide capital to them; c) Segment-3: AIFs supporting tech-driven innovative manufacturing startups i.e., tech-driven startups from manufacturing-oriented champion sectors under “Make in India” for promoting innovative manufacturing; and d) Segment-4: AIFs supporting sector/stage agnostic startups.
b. Operational flexibilities to address the unique requirements of the segments will be incorporated in the operational guidelines. This will include: (i) Supporting AIFs with larger corpuses to increase the availability of funds required for capital intensive segments such as deep tech and manufacturing; (ii) Supporting longer duration (term) AIFs to cater to startups having longer R&D cycles and gestation periods; (iii) Higher contribution from the Scheme for specific segments as deep tech and manufacturing wherein private capital is limited and cautious; and (iv) Moderation of investment multiplier (minimum amount an AIF must invest in startups as a multiple of the amount committed to it under the Scheme) to encourage larger number of AIFs to benefit from the Scheme and invest in startups;
c. Positioning the Startup India FoF 2.0 as an umbrella framework for co-investment or contribution of additional corpus for specific domains by Ministries/departments as well as institutional investors
d. Strengthened monitoring and evaluation system by constituting an Empowered Committee (EC) with inter-ministerial representation for guidance and oversight.
e. Promoting ecosystem development by earmarking up to 5% of returns for activities such as sensitization, workshops, capacity building, plug and play shared facilities, mentorship, and regulatory support.
f. Having more than one Implementation Agency (IA) for building capacity of other institutes to manage such Schemes.
2. Implementation Mechanism
2.1. The operational guidelines will be issued by Department for Promotion of Industry and Internal Trade (DPIIT) with broad operational mechanism of FFS 1.0 and incorporating other aspects important to realise the expanded scope of the proposed Scheme. The operational guidelines will cover the detailed segment-wise provisions, eligibility criteria for AIFs and startups, selection and monitoring processes, reporting and assessment requirements, mechanism for disbursal of funds to IAs and AIFs, composition of investment committee, and all other details necessary for operating the Scheme.
2.2. The implementation of the Scheme will inter-alia entail:
a. Small Industries Development Bank of India (SIDBI), Implementation Agency (IA) of the FFS 1.0, shall also be the Implementing Agency for the Startup India FoF 2.0. In addition, another domestic IA(s) shall also be selected to implement the proposed Scheme.
b. The IAs will seek proposals from AIFs and conduct due diligence, post which a Venture Capital Investment Committee (VCIC) constituted by DPIIT, which would include representation from the industry, subject matter experts, and IAs, will consider the proposals for recommendation. VCIC will consider AIFs managed by experienced professionals with proven track records for funding under the Scheme.
c. AIFs, being pooled investment vehicles, will also raise funds from other investors/ contributors. After raising funds to meet the target corpus amount including from Startup India FoF 2.0, AIFs will evaluate startups for investments, which will take place in tranches over a period. Post investments, the supported AIFs will mentor and nurture their investee startups before exit/sale of investments.
3. Monitoring and Governance
3.1 An ‘Empowered Committee (EC)’ chaired by Secretary, DPIIT shall be constituted, which inter-alia will monitor implementation and performance of the Scheme. EC will include representatives from concerned line Ministries/Departments, National Startup Advisory Council and special invitees from the startup ecosystem. The EC shall have the powers to amend the Scheme notification and operational guidelines for effective implementation of the Scheme within the broad contours as approved by the Cabinet.
[F. No. P-38015/17/2025-STARTUP INDIA]
ATEESH KUMAR SINGH, Addl. Secy.
