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News: The government has notified Startup India Fund of Funds 2.0 with ₹10,000 crore corpus to mobilise capital and strengthen the startup ecosystem.
About Startup India Fund of Funds 2.0
- It is a government-backed fund with ₹10,000 crore corpus to mobilize venture and growth capital for startups.
- Ministry: It is under the Ministry of Commerce and Industry.
- Implementation Agency: The Small Industries Development Bank of India (SIDBI) will operationalize the scheme, along with another domestic agency.
- Aim: It aims to mobilise long-term domestic capital, strengthen the venture capital ecosystem, and support innovation-led entrepreneurship.
- Funding Mechanism: The fund will invest in SEBI-registered Alternative Investment Funds (AIFs), which will further invest in startups through equity and equity-linked instruments.
- Eligibility: Eligible entities are SEBI-registered Alternative Investment Funds (AIFs) that receive support under the scheme.
- Duration: Investments under the scheme will be made over the 16th and 17th Finance Commission cycles.
- Key Features of FoF 2.0:
- Segmented Funding Approach: It focuses on deep tech, early-stage startups, and innovative manufacturing sectors.
- Structured Governance: Selection of AIFs will be done by Venture Capital Investment Committee (VCIC) with monitoring by Empowered Committee (EC).
- National Reach: It promotes investment beyond major cities to ensure wider innovation.
- Addressing Capital Gaps: It directs funds towards high-risk and capital-intensive sectors.
- Significant: It will strengthen economic resilience, generate high-quality jobs, and position India as a global innovation hub.
About Startup India Fund of Funds 1.0
- Launch and Purpose: It was launched in 2016 under Startup India Action Plan to address funding gaps.
- Corpus Utilisation:₹10,000 crore was allocated under the scheme.
- Ecosystem Role: It helped nurture first-time founders and strengthen the domestic venture capital ecosystem.
