The Union Cabinet, chaired by Prime Minister Narendra Modi, approved Startup India Fund of Funds 2.0 (FoF 2.0) with a total corpus of ₹10,000 crore on 21 February 2026. The scheme is the successor to the original Fund of Funds launched in 2016 under the Startup India initiative, which had a corpus of ₹10,000 crore and had commitments to 145 Alternative Investment Funds (AIFs) at the time of the Cabinet release.
FoF 2.0 is designed to mobilise domestic venture capital and catalyse private investment in India's deep-technology sectors. The key focus areas include artificial intelligence, semiconductor design and fabrication, clean energy technologies, advanced manufacturing, and agri-tech. The Department for Promotion of Industry and Internal Trade (DPIIT) will be the implementing agency, working through SIDBI (Small Industries Development Bank of India) as the fund manager.
The scheme aims to address a critical gap in the Indian startup ecosystem: while early-stage funding is relatively accessible, growth-stage and deep-tech startups often struggle to raise large domestic rounds due to limited appetite among Indian institutional investors. FoF 2.0 invests in AIFs, which in turn invest directly into startups, thereby creating a multiplier effect on the total capital deployed.
For Rajasthan, the scheme holds special relevance. The state is home to a growing startup ecosystem, particularly in Jaipur and Jodhpur, with strengths in agri-tech, defence manufacturing, and renewable energy. The Rajasthan Startup Policy 2022 and the iStart portal have already registered over 8,000 startups; FoF 2.0 funding flowing through AIFs is expected to benefit Rajasthan-based ventures in these priority sectors.
From an exam perspective, this scheme is important for understanding India's venture capital architecture, the role of DPIIT in startup policy, and the government's broader strategy of Atmanirbhar Bharat through domestic capital mobilisation.