Fund of Funds for Startups (FFS)

What is the Fund of Funds for Startups?

Fund of Funds for Startups (FFS) is a scheme of the Department for Promotion of Industry and Internal Trade (DPIIT) that puts government capital into SEBI-registered Alternative Investment Funds, which in turn invest in DPIIT-recognised startups. FFS was announced under the Startup India Action Plan in 2016 with a corpus of Rs 10,000 crore and is operated by the Small Industries Development Bank of India (SIDBI) as Implementation Agency.

Fund of Funds for Startups does not invest in a single startup. It invests in the funds that invest in startups, the "daughter funds". The design was deliberate: Indian venture capital in 2016 was dominated by foreign limited partners, and domestic capital for early-stage risk investment was scarce. By anchoring domestic AIFs, FFS was meant to crowd in private money rather than replace it.

Startup India Fund of Funds 2.0 carries the model forward. The Cabinet approved it with a fresh corpus of Rs 10,000 crore for commitments to eligible AIFs spread across the 16th and 17th Finance Commission cycles. It came into force on 13 April 2026 through Gazette notification CG-DL-E-13042026-271764, with operational guidelines dated 25 April 2026.

Key objectives

• Mobilise domestic venture capital for Indian startups.
• Reduce dependence on foreign limited partners for early-stage funding.
• Support first-time and smaller fund managers who cannot easily raise an anchor commitment.
• Channel capital into deep tech, innovative manufacturing and early growth stage startups.

Main features

• FFS commits capital to Category I and Category II AIFs registered with SEBI; these are the daughter funds.
• Daughter funds must deploy into DPIIT-recognised startups.
• SIDBI manages selection, due diligence, commitment and monitoring.
• FFS 1.0 had deployed roughly Rs 7,500 crore by the end of FY25 across more than 100 AIFs, which invested in over 1,000 startups.
• FFS 2.0 prioritises deep tech, early growth stage, technology-driven manufacturing and sector or stage agnostic funds.

Who is eligible for the Fund of Funds for Startups?

Who can apply:

• SEBI-registered Alternative Investment Funds, Category I and Category II, seeking an anchor or supporting commitment from SIDBI.
• Fund managers who can demonstrate an investment team with a credible track record, a defined strategy and a pipeline of DPIIT-recognised startups.
• Funds committing to deploy into the priority segments identified under FFS 2.0 to deep tech, early growth stage backed by smaller AIFs, technology-driven and innovative manufacturing, and sector or stage agnostic startups.

Who cannot apply:

• Startups cannot apply to FFS or to SIDBI for money under this scheme. FFS makes no direct investment in any startup, so there is no startup application form, no beneficiary list and no disbursement to a founder.
• Individual entrepreneurs and proprietors are not eligible; FFS is an institutional capital commitment, not a personal benefit.
• Unregistered funds, angel syndicates without SEBI AIF registration and informal investment vehicles are not eligible for a commitment.
• Funds that do not intend to invest in DPIIT-recognised startups are not eligible, since that is the core condition attached to the commitment.
• Anyone looking for a grant or subsidy is in the wrong scheme — FFS money reaches startups only as commercial equity or equity-linked investment made by a private fund manager.

What documents are required for the Fund of Funds for Startups?

How to apply for the Fund of Funds for Startups

FFS has an institutional application route only. This is the process for a fund manager.

1. Register the fund with SEBI as a Category I or Category II Alternative Investment Fund and complete the fund documentation: trust deed, PPM and contribution agreement.
2. Open the SIDBI venture capital application portal at vcfapplication.sidbi.in, which is the application route named on the SIDBI Fund of Funds site.
3. Submit the application with the SEBI registration certificate, fund documents, team track record, target corpus, investment strategy and the priority segment the fund addresses.
4. Go through SIDBI due diligence, covering the manager's prior performance, governance, fee structure, proposed sectors and the pipeline of DPIIT-recognised startups.
5. Receive the commitment decision from SIDBI's investment committee, which fixes the amount SIDBI will contribute to the fund.
6. Execute the contribution agreement and draw down the commitment in tranches as the fund calls capital from all its investors.
7. Report deployment to SIDBI: how much was invested, in which DPIIT-recognised startups, and against which priority segment.

If you are a founder, not a fund manager, the route is different and it is worth being blunt about it: identify the AIFs that have received FFS commitments, and pitch to them directly as you would to any venture fund. There is no government window through which a startup can request FFS money.

How much does the Fund of Funds for Startups provide?

FFS provides capital to funds, not grants to companies.

• FFS 1.0 corpus: Rs 10,000 crore, announced under the Startup India Action Plan in 2016.
• Deployment under FFS 1.0: about Rs 7,500 crore by the end of FY25, across more than 100 AIFs and over 1,000 startups.
• Startup India Fund of Funds 2.0 corpus: a further Rs 10,000 crore, for commitments spread over the 16th and 17th Finance Commission cycles.

SIDBI's commitment to any single fund is a share of that fund's corpus, not the whole of it. The rest must be raised from private limited partners, which is how the scheme multiplies public money into a larger pool of venture capital. Under FFS 2.0, the daughter funds are expected to invest at least twice the committed amount into startups, so the Rs 10,000 crore corpus is designed to catalyse a far larger flow of private venture capital.

FFS 1.0 and Fund of Funds 2.0 compared

Why founders often misunderstand FFS

Three misconceptions come up repeatedly, and all three cost founders time.

• "FFS gives startups Rs 10,000 crore." The corpus is committed to funds, and each fund invests its own way, on its own terms and timeline.
• "DPIIT recognition entitles me to FFS money." Recognition makes a startup an eligible investee for a daughter fund. It creates no entitlement to investment.
• "There must be an application form somewhere." For startups there is none. The only applicants are SEBI-registered AIFs.

Founders looking for early-stage government support should examine the Startup India Seed Fund Scheme for grants and convertible debentures, and the Credit Guarantee Scheme for Startups for collateral-free debt.

Help and grievance redressal

• Startup India toll free helpline: 1800 115 565, 10:00 AM to 5:30 PM
• Startup India portal: startupindia.gov.in, for DPIIT recognition and the list of government schemes for startups
• SIDBI Fund of Funds: sidbivcf.in, for scheme documents and the AIF application portal
• SIDBI venture capital application portal: vcfapplication.sidbi.in

No consultant can secure an FFS commitment for a fund or an investment for a startup. Any person offering to arrange government venture money for a fee should be refused.