India’s Commerce and Industry Minister Piyush Goyal has announced that the government is in the final stages of preparing guidelines for the second Fund of Funds (FoF) for startups, which is expected to be rolled out shortly.
This new fund, allocated ₹10,000 crore in the current Union Budget, aims to provide sustained financial support to startups — particularly those in high-technology and deep-tech sectors — and to bolster innovation and scaling in manufacturing and other advanced industries.
Key Highlights
- Government to roll out second ₹10,000 crore Fund of Funds supporting deep-tech, manufacturing-focused startups nationwide.
- New fund aims to provide patient capital, flexible financing, strengthening India’s startup ecosystem and growth.
The upcoming FoF is a continuation of the original scheme launched in 2016, whose ₹10,000 crore corpus has now been fully utilised, helping channel over ₹25,000 crore into the startup ecosystem. Unlike the first tranche, the second FoF will look beyond traditional equity, offering flexible financing options such as debt and alternative instruments with longer investment horizons.
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Goyal highlighted that an important objective of the new fund is to make patient capital available to deep-tech startups, which often require more time to generate returns compared with typical service-oriented ventures.
The government has also eased procurement processes, including simplified pre-qualification criteria on the Government e-Marketplace (GeM), and is supporting startups through various ministry-led initiatives across sectors such as defence, electronics, biotech and railways.
