Indian Government Launches Startup India Fund of Funds 2.0

The Indian government has approved the second phase of the Startup India Fund of Funds Scheme with a total corpus of Rs 10,000 crore. This initiative aims to support early-stage startups and promote deep-tech research, according to a statement from Prime Minister Narendra Modi on social media.

On February 13, 2026, Modi signed the approval documents on his first day at the newly established office, known as Seva Teerth. This date is significant, marking 95 years since New Delhi was officially inaugurated as India’s capital in 1931. The Prime Minister’s shift to the modern office reflects a renewed focus on empowering marginalized communities, farmers, and youth.

The initial Fund of Funds was launched in 2016, also with a corpus of Rs 10,000 crore. Its purpose was to provide seed capital, enabling startups to undertake calculated risks. Following the successful deployment of the first tranche, the government allocated an additional Rs 10,000 crore in the Union Budget for 2025-26.

As of now, over 200,000 entities have been recognized as startups by the Department for Promotion of Industry and Internal Trade (DPIIT), making them eligible for various incentives under the Startup India action plan. The scheme aims to catalyze venture capital investments and is managed by the Small Industries Development Bank of India (SIDBI). SIDBI provides capital to Securities and Exchange Board of India (SEBI)-registered Alternative Investment Funds (AIFs), which then invest in startups.

AIFs operating under the Fund of Funds Scheme are required to invest at least twice the amount committed under the scheme back into startups. The DPIIT serves as the monitoring agency, ensuring compliance and effective utilization of the funds.

This latest initiative underscores the government’s commitment to fostering innovation and entrepreneurship in India, aiming to create a robust ecosystem that supports startups at every stage of their journey.