Modi government approves ₹10,000cr FoF to boost deep-tech start-ups
What's the story
The Indian government has approved a ₹10,000 crore Fund of Funds (FoF) to mobilize venture capital and support deep-tech start-ups and early-growth stage enterprises. The move is part of the second phase of the FoF scheme under the Start-up India initiative. The first phase was set up in 2016 with a similar corpus to provide seed capital and enable start-ups to take calculated risks.
Scheme expansion
Fund to strengthen venture capital ecosystem
The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the establishment of the Start-up India Fund of Funds 2.0 with a total corpus of ₹10,000 crore. The scheme is aimed at strengthening the venture capital ecosystem and supporting innovation-led entrepreneurship across India. It will also mobilize the long-term domestic capital to accelerate the next phase of India's start-up journey.
Funding strategy
Targeted funding approach for deep-tech and innovative manufacturing
The new fund will take a targeted and segmented funding approach to support deep-tech and tech-driven innovative manufacturing. It will focus on cutting-edge sectors that require long-term capital. The scheme also aims to empower early-growth stage founders, offering a safety net for new and innovative ideas while reducing early-stage failures due to lack of funding.
Investment outreach
Fund to promote investments beyond major metropolitan areas
The new fund will also promote investments beyond major metropolitan areas, ensuring innovation flourishes across India. It has been designed to address high-risk capital gaps and strengthen India's domestic venture capital base, especially smaller funds, further boosting the domestic investment landscape. An Empowered Committee will guide and direct the Start-up India FoF 2.0 scheme for effective implementation.