Budget 2025: FM Sitharaman announces ₹10,000 crore for new startup Fund of Funds

Nirmala Sitharaman also said that a Deep Tech Fund of Funds will also be explored to catalyze the next generation startups as a part of this initiative.

Updated on: Feb 1, 2025, 16:12:32 IST

By HT News Desk

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Union finance minister Nirmala Sitharaman on Saturday announced that a new ‘Fund of Funds’ for startups will be set up with an expanded scope and a fresh contribution of ₹10,000 crore.

Union Finance Minister Nirmala Sitharaman presents the Union Budget 2025-26 in the Lok Sabha, in New Delhi, Saturday, Feb. 1, 2025. (Sansad TV)

In her 8th budget speech, the finance minister announced that Alternate Investment Funds (AIFs) for startups have received over ₹91,000 crore in commitments, supported by a ₹10,000 crore government Fund of Funds.

A fund of funds (FoF) differs from traditional investment models by pooling resources to invest in other venture capital or private equity funds, rather than directly investing in individual companies.

According to a report by GlobalData, funding for Indian startups fell by 66 percent in value from January to November 2023. During this period, Indian startups secured $6.9 billion across 1,013 venture capital deals. In comparison, the same period in 2022 saw startups raise $20.2 billion.

Beyond increased funding, startups will also gain improved access to credit. The finance minister outlined a plan to offer loans between ₹10 crore and ₹20 crore, with a reduced guarantee fee of just 1 percent. These loans will be targeted at 27 key sectors crucial for the success of the ‘Atmanirbhar Bharat’

Finance minister Nirmala Sitharaman also said that a Deep Tech Fund of Funds will also be explored to catalyze the next generation startups as a part of this initiative.

Prime Minister Narendra Modi reacted to the Union Budget presented by finance minister Nirmala Sitharaman in Parliament today, saying the document is a milestone in India's development journey.

“Today is an important milestone in India's development journey. This is the budget of aspirations of 140 crore Indians. This is a budget that fulfils the dreams of every Indian. We have opened many sectors for the youth. The common citizen is going to drive the mission of Viksit Bharat,” he said in a video statement.

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