Cabinet Clears ₹10,000 Cr Startup Fund 2.0

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved a ₹10,000 crore Fund of Funds for Startups (FFS) 2.0 to strengthen India’s venture capital ecosystem and fuel the next phase of startup growth.

The new corpus builds on the success of the original Fund of Funds for Startups (FFS 1.0), launched in 2016 under the Startup India initiative. Since the programme’s inception, India’s recognised startup base has expanded from fewer than 500 ventures to over 2 lakh.

Under FFS 1.0, the entire ₹10,000 crore corpus was committed to 145 Alternative Investment Funds (AIFs), which collectively invested more than ₹25,500 crore into over 1,370 startups across sectors such as artificial intelligence, clean energy, fintech, biotech, manufacturing, space tech, and agriculture.

FFS 2.0 will adopt a more targeted approach, focusing on deep tech, technology-driven manufacturing, and innovation in high-tech domains that require patient, long-term capital. The scheme aims to bridge funding gaps in high-risk areas, support early-growth founders, and reduce startup failures caused by capital shortages.

The new fund also seeks to channel investments beyond metro cities, promoting entrepreneurship across Tier-2 and Tier-3 regions. By backing globally competitive technologies and innovation-led enterprises, the government expects the scheme to strengthen economic resilience, create high-quality jobs, and advance India’s vision of becoming a developed nation by 2047.