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Budget 2025 allocates Rs 10,000-Cr ‘Fund of Funds’ boost for startups

In the Union Budget 2025, the Indian startup sector received a significant boost as Finance Minister Nirmala Sitharaman announced the creation of a new Fund of Funds (FoF), with a fresh allocation of Rs 10,000 crore and an expanded scope.

According to the FM, the previous FoF, also with an investment of Rs 10,000 crore, successfully generated commitments totalling Rs 91,000 crore.

“The renewal of the Rs 10,000 crore commitment to the Fund of Funds for AIFs is a significant step forward for the Indian startup and investment ecosystem. The initial Rs 10,000 crore commitment catalysed ₹91,000 crore in investments, and I fully expect this fresh infusion to attract an additional ₹1 lakh to ₹1.5 lakh crore in capital,” Anirudh Damani, managing partner, Artha Venture Funds.

Damani added that this initiative will provide much-needed growth capital to early-stage startups, further strengthening India’s position as a global innovation hub. “We are supremely excited about this development and look forward to actively participating in this next wave of investment momentum,” he said.

The government launched the first Fund of Funds (FoF) in 2016, channelling these funds through SEBI-registered AIFs.This initiative has significantly boosted the Indian startup ecosystem in recent years. The Finance Minister also announced a new scheme to support 5 lakh women entrepreneurs from SC/ST communities.

Focusing on research and development (R&D), the FM introduced a FoF for the deep tech sector, designed to stimulate the growth of next-generation startups in India. Over the next 5 years, the Centre will provide 10,000 fellowships for tech research at IITs and IISc.

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