The Department for Promotion of Industry and Internal Trade (DPIIT) has issued operational guidelines for the Startup India Fund of Funds 2.0 (FoF 2.0) , laying out a structured framework to deploy the ₹10,000 crore corpus.
The guidelines establish clear mechanisms for fund allocation, governance, and monitoring, with the objective of improving the efficiency and depth of capital flows into India's startup ecosystem.
Under the scheme, investments will be routed through SEBI-registered Category I and II Alternative Investment Funds (AIFs), which in turn will invest in DPIIT-recognised startups. This indirect investment model is designed to crowd in private capital, promote disciplined fund management, and ensure wider access to funding across sectors, stages, and geographies. SIDBI will serve as the initial Implementation Agency, with an additional agency to be onboarded to broaden sectoral expertise and institutional capacity.
A notable feature of FoF 2.0 is its segmentation of AIFs into focused categories-including deep tech, micro venture capital for early-stage startups, technology-led manufacturing, and sector-agnostic funds. Each segment has defined parameters on corpus size, government contribution limits, tenure, and private capital mobilisation ratios, reinforcing market discipline while directing capital toward priority sectors.
The framework also introduces a two-stage AIF selection process involving detailed due diligence and evaluation by a Venture Capital Investment Committee comprising industry and ecosystem leaders. With built-in provisions for co-investments, capacity-building initiatives, and adaptive flexibility, FoF 2.0 is positioned as a catalytic instrument aimed at strengthening domestic venture capital, supporting innovation-driven enterprises, and advancing India's ambition to remain a leading global startup hub.
startup fund of fund DPIIT DPIITStartup SEBI
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