Startup India FoF 2.0

India has formally put Startup India Fund of Funds 2.0 into effect, setting up a ₹10,000 crore pool to back startups through venture funds, not direct government cheques. (gazettetracker.com) The Union Cabinet approved the scheme on February 14, 2026, and the Department for Promotion of Industry and Internal Trade notified it on April 13, 2026. The government said the money is meant to mobilize venture capital for India’s startup ecosystem. (pib.gov.in) (gazettetracker.com) This is a fund of funds, which means the state will contribute to Securities and Exchange Board of India-registered Alternative Investment Funds, and those funds will invest in startups through equity or equity-linked instruments. Small Industries Development Bank of India will act as an implementation agency, and the Department for Promotion of Industry and Internal Trade will issue operating rules. (gazettetracker.com) (sidbivcf.in) The new scheme shifts from the first fund’s broad market-building role to a segmented approach. The notification says allocations will target deep technology, early-growth startups including micro venture capital funds, technology-led manufacturing under Make in India, and a sector- and stage-agnostic bucket. (gazettetracker.com) (pib.gov.in) The timing follows the near-complete rollout of the first Startup India fund of funds. The government said Fund of Funds for Startups 1.0 committed its full ₹10,000 crore corpus to 145 Alternative Investment Funds, which then invested more than ₹25,500 crore in over 1,370 startups. (pib.gov.in) That first program was approved in 2016 and was spread across the 14th and 15th Finance Commission cycles. The new one will spread commitments across the 16th and 17th Finance Commission cycles, giving the government another multiyear window to channel capital into venture funds. (static.pib.gov.in) (gazettetracker.com) The structure also means startup founders will not apply to New Delhi for money from this scheme. They will still need to raise from private fund managers, and the practical effect of Fund of Funds 2.0 will depend on which Alternative Investment Funds win commitments and what sectors they choose to finance. (sidbivcf.in) (gazettetracker.com) The notification gives the government more flexibility than before. It allows support for larger and longer-duration funds, higher scheme contributions in some segments, and a moderated investment multiplier, while reserving up to 5% of distributions for ecosystem capacity building before the rest goes to India’s Consolidated Fund. (gazettetracker.com) Oversight will sit with an Empowered Committee chaired by the Secretary of the Department for Promotion of Industry and Internal Trade, while a Venture Capital Investment Committee will recommend which funds receive backing. The money is now notified, but the next signal for founders and fund managers will be the operating guidelines and the first set of approved funds. (gazettetracker.com)