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.