Masterstroke by Modi government amid West Asia crisis as centre rolls out guidelines for Rs 10,000 crore startup India fund of funds 2.0 to drive private investments
The Centre has issued guidelines for the Rs 10,000 crore Startup India Fund of Funds 2.0, aiming to channel capital through AIFs and attract greater private investment into India's startup ecosystem.
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New Delhi: In a significant economic push for the economic growth of the country, the government on Saturday announced the operational guidelines for the Rs 10,000 crore Startup India Fund of Funds 2.0 (FoF 2.0). Aiming to streamline capital deployment and improve funding access for startups across sectors and stages, the new operational guidelines of the Modi government lay out clear mechanisms for fund deployment, governance and monitoring, positioning the scheme as a catalyst for private investment rather than a direct funding route. Here are all the details you need to know about the guidelines around the Rs 10,000 crore Startup India Fund of Funds 2.0 (FoF 2.0).
What are the new comprehensive framework to operationalise second edition of the Fund of Funds scheme?
The Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry has unveiled a comprehensive framework to operationalise the second edition of the Fund of Funds scheme, with a focus on improving the efficiency of capital flows into India's startup ecosystem, a report by IANS news agency said.
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Under the new framework of the Department for Promotion of Industry and Internal Trade, investments will be routed through SEBI-registered Category I and II Alternative Investment Funds (AIFs), which will, in turn, invest in DPIIT-recognised startups. This model is expected to ensure disciplined capital allocation while encouraging greater participation from private investors and expanding funding access across geographies and sectors, the report said.
What will be the new role of SIDBI as the initial implementation agency?
The Small Industries Development Bank of India (SIDBI) has been designated as the initial implementation agency and will oversee execution through a structured process of selecting and monitoring AIFs.
What will be the new segmented approach to AIFs, covering deep-tech focused fund?
In order to bridge funding gaps in the ecosystem, the guidelines propose a segmented framework for AIFs, including deep-tech focused funds, micro venture capital funds for early-stage startups, funds aimed at innovation-led manufacturing sectors and sector-agnostic funds.
Each category is governed by specific parameters, such as corpus size, limits on government contribution, tenure, and minimum private capital mobilisation, ensuring funds are deployed in a targeted and efficient manner, the IANS report said.
(With inputs from agencies)
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