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Finance minister Nirmala Sitharaman announced a new fund of funds (FoF) for startups
This comes after the government's allocation of INR 10,000 Cr for the previous FoF for startups has been completely utilised
FM also announced a new scheme for 5 Lakh scheduled caste/tribe first-time women entrepreneurs, providing them term loans of up to INR 2 Cr
Finance minister Nirmala Sitharaman has announced a new fund of funds (FoF) for startups with a corpus of an additional INR 10,000 Cr.
“Now a new fund of funds with expanded scope and a fresh contribution of another INR 10,000 Cr will be set up,” said Sitharaman.
This comes after the government’s allocation of INR 10,000 Cr for the previous FoF for startups has been completely utilised. The minister, while presenting the Union Budget 2025, said this FoF has resulted in commitment of INR 91,000 Cr for startups.
In addition, the FM also announced a new scheme for 5 Lakh scheduled caste/tribe first-time women entrepreneurs, providing them term loans of up to INR 2 Cr.
Further to push the country’s entrepreneurial growth, online capacity building for entrepreneurship and managerial skills will also be organised.
In addition, Sitharaman said that the government will explore setting up a fund of funds for the deeptech sector to catalyse the next generation of startups. The FM also announced an allocation of INR 20,000 Cr for research and innovation initiatives of the private sector in the session today.
It is pertinent to note that recently, former NITI Aayog CEO Amitabh Kant also called for a deeptech-focussed fund of funds (FoF) for startups amid growing investor interest in generative artificial intelligence (GenAI) in India.
Launched in 2016, the FoF for startups was aimed at providing a boost to the Indian startup ecosystem and increasing capital inflows into the space.
By the end of fiscal year FY24, the Centre committed more than INR 10,500 Cr for alternative investment funds (AIFs) under the FFS scheme. This translated to an investment of more than INR 18,000 Cr in startups by the end of FY24.
The announcement comes at a time when the startup ecosystem emerged somewhat stronger in 2024 after the funding winter and layoff spree of the previous two years. As per Inc42, Indian tech startup funding surpassed the $12 Bn mark across 993 deals in 2024, marking a 20% increase compared to 2023.
