Cabinet Approves Rs. 10,000 Crore Startup India Fund of Funds 2.0 to Strengthen Venture Capital Ecosystem

The government of India approved Startup India Fund of Funds 2.0 to boost the venture capital ecosystem, according to the reports. To encourage venture capital, support deep tech, empower founders and more, the Union Cabinet has authorized a Rs. 10,000 crore fund for startups.

By unleashing long-term domestic capital, strengthening the venture capital environment and fostering innovation driven entrepreneurship throughout the nation, the program seeks to accelerate the next stage of India’s startup development, as per the reports.

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Startup India FoF 2.0, which was launched as part of the Startup India initiative, builds on ten years’ worth of continuous work to establish India as a top startup hub worldwide. India’s startup ecosystem has undergone an incredible shift since the introduction of Startup India in 2016, expanding from less than 500 firms to over 2 lakh Department for Promotion of Industry and Internal Trade (DPIIT) recognized startups today, with 2025 seeing the greatest number of annual startup registrations ever, reported by PIB.

The goal of Startup India FoF 2.0 is to advance Indian innovation, whereas the initial phase focused on creating the ecosystem. The new fund will use a focused, segmented funding strategy to back, reported by the PIB further as:

• Prioritizing advances in high tech fields that need patience, long-term capital is the focus of deep tech and tech driven innovative manufacturing.
• Supporting founders in the early stages of development by establishing a safety net for novel and creative ideas, thereby lowering the risk of early stage failures brought about by insufficient funding.
• Promoting investment outside big cities so that innovation flourishes everywhere.
• Intended to solve significant capital gaps in high risk sectors by channeling more funds into key areas that are essential for self sufficiency and promoting economic development.
• Enhance the domestic venture capital foundation of India, with a focus on smaller funds, in order to improve the local investment environment.