India's electronics fund of funds mobilises ₹1,336 crore across 128 startups
What's the deal? India's Ministry of Electronics and Information Technology (MeitY) said its Electronics Development Fund (EDF) has invested ₹257.77 crore across eight venture capital funds, which together mobilised ₹1,335.77 crore into 128 startups working in electronics system design and manufacturing (ESDM) and information technology (IT).
How it works: The EDF is structured as a "Fund of Funds," channelling government capital into SEBI-registered venture funds — called Daughter Funds — that in turn back companies developing indigenous technology. Canbank Venture Capital Funds Ltd. is the fund manager, with MeitY as anchor investor.
Where the money went: As of June 30, 2026, Karnataka was the largest beneficiary. Bengaluru alone drew ₹854.54 crore across 89 companies, followed by Mumbai and Pune with ₹142.48 crore across eight, and Hyderabad with ₹129.97 crore across seven.
Of the 128 companies, 77 operate in ESDM and 51 in IT. Other destinations included Chennai, Delhi, Kochi, Gurugram, Jaipur, Kolkata and Noida.
Why now? The fund has completed its investment phase, which ended in February 2024, and is now in the divestment phase as the government exits its stakes through the Daughter Funds.
What's the endgame? The programme was launched to seed market-driven innovation in electronics manufacturing and build a self-sustaining domestic ecosystem through venture-backed financing. Startup selection weighed innovation capability, indigenous technology, intellectual property potential, founding-team expertise and commercial scalability.
By the numbers: MeitY said the Daughter Funds leveraged its investment to raise nearly five times more from the market. Backed startups have collectively raised about ₹22,553.82 crore and created or acquired 373 intellectual property assets.
The signal: With the fund now exiting, the programme offers an early read on whether state-anchored risk capital can crowd in private investment for India's push toward electronics self-reliance — a test as the country works to deepen a domestic manufacturing base.
Read more: storyboard18.com
Image credit: wolf.arthur
