The Fund of Funds for Startups (FFS) is one of the most misunderstood schemes in Indian startup funding. Many founders search for a way to “apply to the Fund of Funds” and end up on forms that were never meant for them. The scheme does not invest in your company directly. It invests in venture funds, and those venture funds then decide which startups to back. This guide explains the idea in plain English, what the newer Startup India Fund of Funds 2.0 adds, and what you can realistically do as a founder.
Quick facts
- Run by: Department for Promotion of Industry and Internal Trade (DPIIT), with SIDBI as the implementing agency
- Who applies for the money: SEBI-registered Alternative Investment Funds (AIFs), not individual startups
- Who receives the investment: DPIIT-recognised startups, chosen by the funds
- Corpus (as stated in the official June 2026 playbook): Rs 10,000 crore for FFS, and Rs 10,000 crore for FoF 2.0
- Your first step: get DPIIT recognition, then approach the funds that are backed by the scheme
- Last checked: 26 October 2026 against the Startup India Playbook of Government Schemes (June 2026) and the scheme pages on startupindia.gov.in
What Is a Fund of Funds?
A fund of funds does not buy shares in startups. It puts money into other funds. In this scheme, the government gives capital to venture funds, and those funds invest in startups. The official Startup India playbook describes it as a fund that invests in other venture funds (AIFs) rather than directly in startups, so startups receive funding when their venture fund makes an investment.
The idea is simple. A single government office cannot study thousands of early-stage companies. Professional venture funds already do that work. By becoming an anchor investor in those funds, the government hopes to make more private venture capital available to Indian startups.
Who Runs the Fund of Funds for Startups (FFS)?
According to the official playbook, the government established FFS to catalyse venture capital investment. DPIIT is the department in charge. SIDBI (the Small Industries Development Bank of India) operates the scheme. SIDBI provides capital to SEBI-registered Alternative Investment Funds, and these funds invest in startups through equity and equity-linked instruments.
The funds that receive money from the scheme must follow a rule about how they use it. The playbook says the supported AIFs are to invest at least twice the contribution made by FFS into startups across stages. This is the “multiplier” idea: the government rupee must be matched by more private money flowing into startups.
What Is Startup India Fund of Funds 2.0?
The playbook says the government has operationalised Startup India Fund of Funds 2.0 (FoF 2.0) with a total corpus of Rs 10,000 crore. SIDBI, which implemented the first scheme, is also an implementing agency for FoF 2.0, and the playbook says another domestic implementing agency will also be selected.
FoF 2.0 supports SEBI-registered Category I and Category II AIFs, which invest in startups through equity and equity-linked instruments. The playbook lists the priority segments:
- Deep tech startups
- Early growth-stage startups supported by smaller AIFs
- Technology-driven and innovative manufacturing startups
- Sector-agnostic or stage-agnostic startups
AIFs supported under FoF 2.0 must follow a minimum investment multiplier that differs by segment. The exact numbers are in the Operational Guidelines published on dpiit.gov.in, so read those rather than relying on a summary.
Can a Startup Apply for the Fund of Funds Directly?
No. This is the single most important point in this guide. The playbook is clear that SEBI-registered AIFs can apply for capital under the scheme. The startups that benefit are those that the selected AIFs choose to fund. The playbook states that eligible startups can approach selected AIFs for investments.
So as a founder, your job is not to fill a form with SIDBI. Your job is to:
1. Build a company that a venture fund would want to invest in.
2. Obtain DPIIT recognition (see our DPIIT recognition guide).
3. Find funds that have received capital from the scheme and approach them with a clear pitch.
How AIFs Apply (Useful to Understand)
Knowing how the funds apply helps you understand who is on the other side of the table. The playbook says the application process for AIFs is digital. A detailed application is submitted on SIDBI’s fund application portal, and each application goes through an eligibility screening and a screening based on a preliminary questionnaire.
You can read more on the SIDBI venture fund website and the DPIIT scheme pages linked in the sources below.
How to Find Funds Backed by the Scheme
SIDBI publishes information about the funds supported by the scheme. Start from the official FFS page and look for the list of supported funds. Then check each fund’s own website for:
- The sectors and stages it invests in
- Typical cheque sizes
- Whether it accepts pitches through a form, a warm introduction or an accelerator programme
- Whether your company type and stage match its focus
A fund that backs fintech at Series A is not a good target for a pre-revenue farm-tech startup. Matching the fund to your stage saves months.
Do You Need DPIIT Recognition?
The playbook says funding under the scheme is provided to DPIIT-recognised startups. Recognition is free and is applied for online. The recognition conditions are covered in our DPIIT guide. Remember that recognition does not guarantee funding. It only makes you eligible to be considered by funds that invest under the scheme.
FFS vs Seed Fund Scheme: What Is the Difference?
Founders often mix up the two. The Startup India Seed Fund Scheme provides early money through approved incubators for proof of concept, prototype development and market entry. The Fund of Funds works at a later and larger level, through venture funds that make equity investments. If you are still building a prototype, look at the Seed Fund and incubators first. If you already have customers and are raising a round, venture funds are the relevant route.
Common Mistakes
- Searching for a form to apply to SIDBI. The scheme funds AIFs, not startups.
- Assuming recognition means money. DPIIT recognition makes you eligible; the fund decides whether to invest.
- Pitching the wrong fund. Many founders send the same deck to every fund. Match sector, stage and cheque size first.
- Trusting agents who promise “FFS funding” for a fee. The official pages describe funds, not startups, as the applicants. Anyone who offers guaranteed government investment for a charge should be treated with caution.
- Using old figures. The scheme has been updated, and the Operational Guidelines carry the current rules. Always check the official page before you rely on a number.
Frequently Asked Questions
Does the government own shares in my startup through this scheme?
Not directly. The government capital goes into the venture fund. The fund then takes the shares in your startup, under its own terms with you.
Is there a minimum or maximum amount a startup can receive?
The official pages describe the corpus and the multiplier rules for funds. They do not set a fixed amount per startup, because each investment is decided by the fund. Check the Operational Guidelines for any condition that applies to the fund you approach.
Is the FoF 2.0 scheme open for applications right now?
The playbook says the application process for AIFs is digital and runs on SIDBI’s portal. Whether it is accepting applications at any moment depends on SIDBI’s notices, so check the official portal. Startups themselves do not apply to the portal.
Where to Go Next
Read the DPIIT recognition guide first, then the Seed Fund Scheme guide, and browse the full list on our Startup India guides hub.
Last checked: 26 October 2026 against the Startup India Playbook of Government Schemes and Initiatives for Startups (June 2026). This is general information, not legal, tax or financial advice. Scheme rules and application windows change, so confirm on the official pages before you act.
