State govts asked to co-invest under Rs.10,000-Cr Startup India Fund of Funds 2.0

The Ministry of Commerce has requested states and union territories to stop creating separate, parallel startup funding vehicles and instead co-invest through the newly approved INR 10,000 crore Startup India Fund of Funds 2.0.This move aims to centralize public capital under a single national framework while expanding venture financing to startups in tier-II and tier-III cities, as well as capital-intensive sectors such as deep-tech and advanced manufacturing.The government initiative seeks to bridge funding gaps and broaden the reach of venture capital beyond major metropolitan hubs. The updated framework introduces four specific investment segments: deep-tech, manufacturing, micro-venture capital, and agnostic funds.The implementation will now follow a multi-agency model overseen by an empowered committee chaired by the secretary of the Department for Promotion of Industry and Internal Trade.