Startup India Fund of Funds: Boosting Growth for Startups

The Startup India Fund of Funds, amounting to Rs 10,000 crore, has been announced by the Indian government to generate venture and growth capital specifically for deep-tech startups, early-stage companies, and technology-centric manufacturing initiatives. This follows the initial Fund of Funds for Startups, known as FFS 1.0, which was introduced in 2016 and serves as an “investor for investors” under the Startup India programme.

Managed by the Small Industries Development Bank of India, which operates under the Department for Promotion of Industry and Internal Trade, this fund invests in SEBI-registered Alternative Investment Funds (AIFs) and has been instrumental in supporting over 1,370 startups.

Structure and Segments of FoF 2.0

FoF 2.0 is designed to invest through SEBI-registered AIFs in equity and equity-linked instruments of government-recognised startups. The fund is divided into four main segments: deep-tech, micro VCs that support early-stage startups, technology-driven manufacturing, and sector-agnostic funds.

Operational Guidelines and Oversight

The operational guidelines will determine the eligibility criteria, methods for fund selection, monitoring processes, and mechanisms for disbursement, including reporting requirements and the structure of the investment committee.

The Department for Promotion of Industry and Internal Trade will publish comprehensive guidelines, while a committee led by its Secretary will monitor implementation and performance.