India launches ₹10,000 crore Fund of Funds 2.0 to back startups
What's the deal? India's Department for Promotion of Industry and Internal Trade (DPIIT) has launched a ₹10,000 crore Fund of Funds 2.0 to support the country's startups. The Small Industries Development Bank of India (SIDBIDealroom has a profile for this one. Try Dealroom →) will manage the fund alongside the DPIIT.
How it works: Rather than backing startups directly, the fund channels capital into venture capital funds (VCFs) and alternate investment funds (AIFs). Those funds then invest in startups across sectors, including technology, healthcare, and education.
What's the endgame? The initiative expands earlier government efforts to widen startup funding access. The DPIIT has issued guidelines covering the selection and monitoring of VCFs and AIFs, along with eligibility criteria for startups seeking support.
The stated goal is to help startups scale up operations and to build a more robust ecosystem. "The launch of the ₹10,000 crore Fund of Funds 2.0 is a significant step towards achieving the government's goal of creating a robust startup ecosystem in the country," a DPIIT official said.
Why now? The DPIIT frames the launch against a backdrop of startups struggling to secure funding in the years leading up to 2026. The fund is positioned as a direct response to that gap.
The signal: By deploying capital through intermediaries rather than picking winners itself, India is doubling down on a government-as-anchor-LP model to draw private venture money into its startup economy.
Read more: Inc42
Image credit: Generated with Gemini
