Budget: Startup sector gets new Fund of Funds, FM to allocate Rs 10K cr

 The Indian startup sector received a boost with Finance Minister Nirmala Sitharaman announcing the establishment of a new fund of funds (FoF) in the Budget 2025. The minister unveiled a fresh FoF with an expanded scope, allocating Rs 10,000 crore. The initial fund of funds announced by the government with an investment of Rs 10,000 crore successfully catalysed commitments worth Rs 91,000 crore, the minister said.

 

“The renewal of the Rs 10,000 crore commitment to the Fund of Funds for alternative investment funds (AIFs) is a significant step forward for the Indian startup and investment ecosystem. The initial Rs 10,000 crore commitment catalysed Rs 91,000 crore in investments, and I fully expect this fresh infusion to attract an additional Rs 1 lakh to Rs 1.5 lakh crore in capital,” said Anirudh Damani, managing partner, Artha Venture Funds.

 

Damani further added that this initiative will provide much-needed growth capital to early-stage startups, further strengthening India’s position as a global innovation hub. “We are supremely excited about this development and look forward to actively participating in this next wave of investment momentum,” he said. The minister also announced that a new scheme will be launched to support 5 lakh women entrepreneurs from scheduled castes (SC) and scheduled tribes (ST).

 

With research and development (R&D) in focus, the minister announced the establishment of a FoF for the deeptech sector. This aims to catalyse next-generation startups in the country. Over the next five years, the Centre will provide 10,000 fellowships for technology research at the Indian Institutes of Technology (IITs) and the Indian Institute of Science (IISc). The first FoF was launched in 2016 by the government of India. The government provides these funds through Securities and Exchange Board of India (Sebi)-registered AIFs, which have given a significant impetus to the Indian startup ecosystem in recent years.

 

 

- Business standard 01st February, 2025