Ashish Agarwal – Co-Founder, Enzyme Office Spaces
The latest addition of ₹10,000 crore to the Fund of Funds is a clear indication of the government’s unyielding support for India’s burgeoning startup ecosystem. This new addition will ensure that there is enough funding available for new age startups which will be proposed now that the existing FoF has already secured funding commitments over ₹9 lakh crore.
Saurabh Tyagi, Co-Founder, CEO of PropChk
With many start-ups today looking for domestic sources for funding, this increased Fund of Funds will come as a pleasant surprise. Proposed deep-tech startups as well as many others in new sectors will particularly benefit from this major funding gap bridge which is estimated at ₹10,000 crore.Kishor Fogla,Founder of Yellow SlicePrivately investing into new age technologies will surely drive a new wedge under private investments in start-ups. With the addition of range extension in the existing FoF, more than ₹9 lakh crore worth funds makes this big shift possible. This shift on funding will widen India’s startup hub and strengthen its global position.Sahil Arya, Co-Founder, Director, Fat TigerThe emphasis on expanding the scope of funding is a sign of the importance attached to the above figure of ₹10,000 crore. It highlights the need for adaptation in funding mechanisms which facilitate the next generation of entrepreneurs.Bhaskar Majumdar, Managing Partner, Unicorn India Ventures“Given that deeptech is being seen as an area for growth at the national level, with a China +1 macro and creation of the PLI/DLI schemes of the government, this is a great step. The Government has created this FoF for deeptech to enable funds to invest in deeptech and back highly innovative startups that can put India in a competitive global AI race. Hand in hand, in continuation of the R&D fund of last year, the Government has enhanced the same for enterprises to enable technology innovation. This shows that the Govt realises the future innovation is the heart of economic growth as the global wars are fought around AI and Semiconductors”Mayuresh Raut, Managing Partner, Seafund
“The increase in credit guarantee for startups from Rs 10 crore to Rs 20 crore is a much needed demand that has been finally accepted. This will not only enable startups to have access to debt capital it will also help them scale faster with less equity dilution. Hence, it will lead to a virtuous cycle of higher top line, less equity dilution, better valuation and better fundraise. As the budget commenced, the FM highlighted that they would like to see 70% women participation in economy building, thus, the addition to credit guarantee will ensure a timely boost as more women entrepreneurs is the need for our ecosystem.With regards to the earlier 3 Centers of Excellence, this along with Krishi Dhan Dhanya program will bring the best of AI practices to the agri-tech startups ecosystem and breed further innovation. Our view is that this requires large patient capital, but aligns us with the renaissance and renewed interest in nuclear energy that is happening all over the world, led by the US. Definitely opens the sector to private investors. Push for data centres consuming huge powers will need nuclear power which will further fuel our AI aspirations”Bruce Keith, Co founder CEO, InvestorAi says
“While the Budget started with a big bang quite literally, the Honourable Finance Minister has announced a string of boosters for the Indian startup sector. The extensions to the loan programs make sense in the context of micro enterprises. However, the crucial fund of funds of Rs 10,000 crore will play a key role in boosting domestic capital in the startup sector. The announcement on deep tech fund, while details are awaited, it should be viewed through the DeepSeek lens of what can be done with relatively small amounts of capital when provided to agile and creative teams. We expect the VC ecosystem to bring velocity and momentum into funding these enterprises.I was especially delighted to hear about the enhancing the “spirit of curiosity and innovation “ with IIT expansions of capacity and centres of excellence for AI education – talent availability is a necessary part of continuing our growth”.
Sridhar Parthasarathy, Co-Founder & General Partner at Bluehill.VCThe government’s announcement of a another Fund of Funds (FoF) worth ₹10,000 crore in the budget is strong commitment to cultivate an entrepreneurial ecosystem and an acknowledgement of Alternative Investment Funds (AIFs) in channeling these resources effectively.While equity funding through AIFs is essential, there is an urgent need for debt financing for startups. The introduction of a credit guarantee will help startups achieve a balanced mix of equity and debt funding, making their growth more sustainable.
Additionally, the plan for a new Deep Tech Fund of Funds is a crucial step towards advancing deep tech innovation in India. This signals a clear intent from the govt to position India strongly in the global AI race, which is much needed boost for deep tech startups specially in AI and space tech”.
Ankur Mittal, CO-Founder, Inflection Point Ventures saysOur ask was a better credit platform and framework for startups and to that extent this is a welcome step. This will allow them to grow and build sustainable businesses and not be dependent on just equity infusion to grow. Their capacity to attract follow-on growth capital will be further strengthened by the additional cash, which will also help them make important investments in operations, personnel, and technology. This action boosts job creation, accelerates startup growth, and creates long-term value in the ecosystem by resolving financial limitations”.Mukul Goyal, Co-Founder of Stratefix Consulting“The Union Budget 2025 has rightly emphasized the pivotal role of MSMEs in India’s economic landscape. With over one crore registered MSMEs contributing approximately 36% to our manufacturing output and 45% to exports, their significance cannot be overstated.The government’s decision to enhance the investment and turnover thresholds for MSME classification is a commendable move. This adjustment will enable more enterprises to avail MSME benefits, fostering growth and competitiveness. Additionally, the increase in credit guarantee cover for micro-enterprises from ₹5 crore to ₹10 crore is a significant step. This initiative is expected to inject an additional ₹1.5 lakh crore in credit over the next five years, empowering small businesses to invest in innovation and expansion.
However, while these measures are promising, it is crucial to address the persistent challenges that MSMEs face. Access to timely and affordable credit remains a hurdle for many small businesses. Streamlining the loan disbursement process and reducing bureaucratic red tape are essential to ensure that the intended benefits reach the grassroots level.
Furthermore, the emphasis on digitization and technology adoption is a welcome move. Encouraging MSMEs to integrate digital tools can enhance operational efficiency and open new market avenues. Providing incentives for technology adoption and digital literacy programs will be instrumental in this transition.
In conclusion, the Union Budget 2025 lays a solid foundation for strengthening the MSME sector. By addressing the existing challenges and building on the proposed initiatives, we can look forward to a more robust and resilient MSME ecosystem, driving India’s journey towards becoming a global manufacturing hub.”