New Delhi

The Union Cabinet has approved the second tranche of the Startup India Fund of Funds Scheme with a corpus of ₹10,000 crore, Union Minister Ashwini Vaishnaw said on Saturday.

The new phase, also referred to as Fund of Funds 2.0, will primarily focus on supporting deep-tech startups, early growth-stage ventures through smaller funds, technology-driven innovative manufacturing startups, as well as sector- and stage-agnostic startups, the minister said.

He added that the scheme will provide greater operational flexibility, including a higher government contribution to Alternative Investment Funds (AIFs) that invest in deep-tech and high-tech manufacturing startups.

The Cabinet took the decision at its meeting held on Friday. According to Vaishnaw, the fund aims to encourage a culture of long-term investing and promote the availability of patient capital for India’s startup ecosystem.

The government had first launched the Startup India Fund of Funds in 2016 with a corpus of ₹10,000 crore to provide seed capital and enable startups to take calculated entrepreneurial risks.

Following the successful utilisation of the first tranche, the second phase with an additional ₹10,000 crore allocation was announced in the Union Budget for 2025–26.

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At present, more than two lakh entities are recognised 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.