Big Boost for Indian Startups: Union Cabinet Approves Rs 10,000 Crore Fund
The Union Cabinet has approved a financial package of Rs 10,000 crore to assist Indian startups in obtaining the necessary funding for their growth and development. The Startup India Fund of Funds 2.0 initiative will support the deep tech and advanced manufacturing sectors while providing funding to first-time founders who need early financial support to succeed with their promising ideas.
Building on the Success of Startup India 1.0
This new fund builds on the success of the first Startup India Fund launched in 2016. During the initial phase, the government committed the entire Rs 10,000 crore corpus to various investment funds, which subsequently invested over Rs 25,500 crore in startups across sectors like artificial intelligence, healthcare, and space technology.
According to the government, the first version of the scheme “played a pivotal role in nurturing first-time founders” and laid a strong foundation for India’s venture capital ecosystem. Over 1,370 startups benefited from the original program, demonstrating the scheme’s effectiveness in bridging the critical early-stage funding gap.
Startup India Fund 2.0: Focus on Deep Tech and Long-Term Investment
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Targeting High-Tech Sectors: The fund focuses on deep tech and advanced manufacturing startups that require patience and long-term capital.
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Addressing High-Risk Capital Gaps: These sectors often face funding challenges as private investors are hesitant to invest in high-risk ventures.
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Fostering Breakthroughs for Self-Reliance: Government support aims to enable technological innovations critical for India’s self-reliance goals.
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Beyond Major Startup Hubs: The scheme encourages investments not only in Bengaluru, Delhi, and Mumbai but also in smaller cities and towns.
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Mobilising Domestic Capital: The fund aims to provide long-term domestic financing to accelerate India’s innovation journey.
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Reducing Foreign Dependence: By focusing on domestic capital, the government seeks to reduce reliance on foreign investment for early-stage startups.
Strengthening India’s Innovation and Job Market
Since 2016, the number of recognised startups in India has surged from fewer than 500 to over 2 lakh, reflecting the country’s growing entrepreneurial spirit. With the new fund, the government aims to sustain this momentum, strengthen economic resilience, enhance manufacturing capabilities, and generate high-quality jobs.
Officials say the Startup India Fund of Funds 2.0 is a “game-changer” for the ecosystem, providing both financial security and confidence to first-time founders. The initiative aligns with the broader national ambition of making India a developed nation by 2047 while positioning startups at the forefront of technological advancement and economic growth.
(With Inputs From ANI)
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