The Government on Saturday (February 14, 2026) announced that it has approved a ₹10,000 crore Fund of Funds aimed at mobilising venture capital and supporting deep tech, technology-driven innovative manufacturing startups, and early-growth-stage enterprises. Notably, this approval marks the second phase of the Fund of Funds (FoF) scheme under the Startup India Initiative, following the first tranche that the government established in 2016.
At the same time, the government designed FoF 2.0 to sustain investment momentum in the startup ecosystem while significantly expanding the scope beyond FoF 1.0. “The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the establishment of the Startup India Fund of Funds 2.0 with a total corpus of ₹10,000 crore for the purpose of mobilising venture capital for the startup ecosystem of the country,” a government statement said. The Cabinet approved the second tranche of the Startup India Fund of Funds Scheme on Friday (February 13, 2026).
Furthermore, the government stated that the scheme aims to accelerate the next phase of India’s startup journey by mobilising long-term domestic capital, strengthening the venture capital ecosystem, and supporting innovation-led entrepreneurship across the country. Earlier, in 2016, the government constituted a ₹10,000 crore Fund of Funds to provide seed capital and enable startups to take calculated risks while scaling their businesses.
Following the effective utilisation of the first tranche, the government sanctioned a second phase of ₹10,000 crore in the Union Budget for 2025–26. Meanwhile, India currently hosts around 100 unicorns, a term used to describe startups valued at USD 1 billion or more. Since the launch of Startup India in 2016, the number of government-recognised startups has grown sharply from approximately 500 to more than two lakh. Significantly, the government recognised over 49,400 startups in 2025 alone, marking the highest number recorded in a single year.
“The Startup India Fund of Funds 2.0 follows the strong performance of the Fund of Funds for Startups (FFS 1.0), which was launched in 2016 to address funding gaps and catalyse the domestic venture capital market for startups,” the statement said.
Under the earlier phase of the scheme, the government committed the entire ₹10,000 crore corpus to 145 Alternative Investment Funds (AIFs). Subsequently, these supported AIFs invested more than ₹25,500 crore across over 1,370 startups nationwide, spanning sectors such as agriculture, artificial intelligence, robotics, automotive, clean technology, consumer goods and services, e-commerce, education, fintech, food and beverages, healthcare, manufacturing, space technology, and biotechnology.
As a result, the first fund played a crucial role in nurturing first-time founders, crowding in private capital, and laying a strong foundation for India’s domestic venture capital ecosystem. While the initial phase focused on ecosystem building, the second phase now aims to elevate Indian innovation to the next level.
Accordingly, the new fund will adopt a targeted and segmented funding approach to support deep tech and technology-driven innovative manufacturing ventures. It will prioritise breakthroughs in high-technology domains that require patient, long-term capital. In addition, the fund will empower early-growth-stage founders by providing a safety net for emerging ideas and reducing early-stage failures caused by funding constraints.
Moreover, the scheme will encourage investments beyond major metropolitan regions to ensure that innovation flourishes across all parts of the country. The government stated that the fund has been structured to address high-risk capital gaps and strengthen India’s domestic venture capital base, particularly by supporting smaller funds to further enhance the investment landscape.
Startup India FoF 2.0 will also operate under the guidance of an Empowered Committee, which will provide strategic direction and oversight. Separately, the government has recently expanded the eligibility criteria for recognising startups by doubling the turnover threshold to ₹200 crore, thereby widening access to policy support and funding opportunities.
With the approval of the Startup India Fund of Funds 2.0, the government reinforces its long-term commitment to building a resilient, innovation-driven startup ecosystem. By mobilising domestic capital, strengthening venture funds, and supporting high-impact technologies beyond metro cities, the initiative positions India to accelerate its next phase of entrepreneurial and technological leadership.
