Deeptech Fund Of Funds

On 1st February, 2025, the Finance Minister Smt Nirmala Sitharaman Ji announced, in the Union Budget of India , the launch of the Fund of Funds Scheme (FOF), a sequel to the original Fund of Funds Scheme for Startups (FFS) introduced in 2016. The original FFS scheme had a corpus of ₹10,000 crore intended to promote the growth of startups in India through SEBI-registered Alternative Investment Funds (AIFs). Even though the FFS scheme successfully mobilized an investment of over ₹90,000 crore, the government is launching this new FOF scheme to address some specific gaps not covered in earlier schemes. The new FOF scheme targets emerging technology, transitioning from consumerization to innovation and raising new investment towards research and development. This strategic focus brings us to the concept of deep tech. Deeptech primarily refers to the startups and companies working on advanced and emerging technologies such as Artificial Intelligence, Quantum Computing, Robotics and Biotechnology . According to a BCG report, Deeptech primarily focuses on technologies and major global issues related to climate change, food security, and disease. The investment in deep tech has an unanticipated impact on society through its intervention in technology, demography, climate, sustainability, and security. They hold great potential to disrupt markets. Countries are increasingly investing in deep tech; for example, the US currently possesses more than 60% of global shares in deep tech, followed by China with 12% and Europe with 14%. Other countries like Israel, Singapore, and Sweden are strongly supporting deep tech. However, several questions arise: Why is the government investing so much in deep technology? How much revenue will this investment generate for the government? What will be the cost to the Government of India’s treasury? And given the volatility in this sector, is the government prepared to bear the potential failure of this scheme?

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