Government Notifies Startup India Fund Of Funds Two Point Zero
ECONOMY & POLICY

Government Notifies Startup India Fund Of Funds Two Point Zero

The Government has notified the Startup India Fund of Funds two point zero with a corpus of Rs 100 billion (bn) to mobilise venture and growth capital for the country’s startup ecosystem. The fund builds on the earlier Fund of Funds for Startups launched in 2016 to address funding gaps and catalyse domestic capital. Commitments will be made to eligible Alternative Investment Funds (AIFs) across the 16th and 17th Finance Commission cycles.

Investments under the fund will prioritise deep technology startups, early growth stage companies supported by smaller AIFs, technology driven and innovative manufacturing startups, and sector or stage agnostic ventures. The emphasis on deep tech and manufacturing aims to support globally competitive technologies and boost domestic production. Smaller AIFs will receive attention to close early stage financing gaps.

A structured selection process will require screening of AIFs by a Venture Capital Investment Committee (VCIC) comprising veterans from the startup ecosystem, and an Empowered Committee (EC) will monitor implementation and performance of the Scheme. The Scheme includes monitoring and oversight mechanisms and provisions for co investment by the Government and institutional investors under an umbrella framework with governance safeguards.

The Small Industries Development Bank of India (SIDBI) will commence operationalisation of the Scheme as the initial Implementation Agency, and another domestic Implementation Agency will be selected to support roll out. Operational guidelines and the composition of the VCIC will be issued by the Department for Promotion of Industry and Internal Trade (DPIIT). The fund will contribute to the corpus of SEBI registered AIFs for investing in recognised startups.

The fund is expected to advance India’s innovation led growth agenda by supporting startups that build competitive technologies and products, strengthening economic resilience and boosting manufacturing capabilities. The Scheme is intended to generate high quality jobs and position India as a global innovation hub. It aligns with the national vision of Viksit Bharat at 2047.

The Government has notified the Startup India Fund of Funds two point zero with a corpus of Rs 100 billion (bn) to mobilise venture and growth capital for the country’s startup ecosystem. The fund builds on the earlier Fund of Funds for Startups launched in 2016 to address funding gaps and catalyse domestic capital. Commitments will be made to eligible Alternative Investment Funds (AIFs) across the 16th and 17th Finance Commission cycles. Investments under the fund will prioritise deep technology startups, early growth stage companies supported by smaller AIFs, technology driven and innovative manufacturing startups, and sector or stage agnostic ventures. The emphasis on deep tech and manufacturing aims to support globally competitive technologies and boost domestic production. Smaller AIFs will receive attention to close early stage financing gaps. A structured selection process will require screening of AIFs by a Venture Capital Investment Committee (VCIC) comprising veterans from the startup ecosystem, and an Empowered Committee (EC) will monitor implementation and performance of the Scheme. The Scheme includes monitoring and oversight mechanisms and provisions for co investment by the Government and institutional investors under an umbrella framework with governance safeguards. The Small Industries Development Bank of India (SIDBI) will commence operationalisation of the Scheme as the initial Implementation Agency, and another domestic Implementation Agency will be selected to support roll out. Operational guidelines and the composition of the VCIC will be issued by the Department for Promotion of Industry and Internal Trade (DPIIT). The fund will contribute to the corpus of SEBI registered AIFs for investing in recognised startups. The fund is expected to advance India’s innovation led growth agenda by supporting startups that build competitive technologies and products, strengthening economic resilience and boosting manufacturing capabilities. The Scheme is intended to generate high quality jobs and position India as a global innovation hub. It aligns with the national vision of Viksit Bharat at 2047.

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