Govt Unleashes Rs 10,000 Crore Surge for Startup Growth

The Union Cabinet led by Prime Minister Narendra Modi sanctioned a Rs 10,000 crore Fund of Funds to empower venture capital for startups in India. This second phase aims to enhance investments, with a focus on deep tech and innovative manufacturing, extending the successful Startup India initiative launched in 2016.

The Union Cabinet, under Prime Minister Narendra Modi's leadership, approved a Rs 10,000 crore Fund of Funds designed to invigorate venture capital within the Indian startup ecosystem. The initiative marks the second phase of the Startup India mission, intending to channel significant funds toward burgeoning startups, particularly those focusing on deep tech and tech-driven innovative manufacturing.

This Fund of Funds 2.0 follows the successful establishment of its predecessor in 2016, which effectively addressed funding gaps and stimulated the domestic venture capital market. Buoyed by the first fund's achievements, this new tranche outlined in the Union Budget for 2025-26 will carry forward the momentum by targeting high-tech innovation and reducing early-stage failures due to lack of funding.

The government expanded the definition of startups, allowing more entities to benefit from increased turnover thresholds. The fund will target smaller venture capital funds to strengthen India's domestic investment landscape while aiming to support startups in various sectors such as AI, robotics, education, healthcare, and clean tech, among others.

(With inputs from agencies.)