The commerce ministry has directed states and Union territories to co-invest through the revamped ₹10,000 crore Startup India Fund of Funds (FoF) 2.0, instead of creating separate startup funding vehicles. This move aims to expand access to venture financing in sectors like deep tech, manufacturing, and emerging startup hubs, according to livemint.com.
More than 15 states currently have their own startup funds, but the central government is encouraging them to pool capital under the Startup India FoF 2.0. This approach is intended to streamline funding efforts and avoid duplication, while providing a larger, more accessible pool of capital for startups across the country, the report said.
The initiative targets sectors such as deep technology and manufacturing, which require substantial capital and have been identified as priorities for India's startup ecosystem. By consolidating resources, the government aims to foster innovation and growth in emerging startup hubs, aligning with broader economic goals to boost entrepreneurship nationwide.
The ₹10,000 crore fund was recently approved by the government, marking a significant commitment to supporting startups. The commerce ministry’s directive signals a coordinated effort to enhance venture financing infrastructure, with the next steps involving states aligning their investments with the central fund’s framework, as detailed by livemint.com.