India’s startup story has been one of the most compelling narratives of the past decade. From just a handful of VC-backed companies in the early 2010s, the country now has over 100 unicorns, more than 200 Indicorns, and over 1.5 lakh recognised startups. This ecosystem has generated jobs and has also transformed everyday life. eCommerce platforms have democratised access to products. Collectively, Indian startups have redefined access, affordability and aspiration.

This has been the Indian startup ecosystem’s 0 to 1 journey. The next decade must be the 1 to 100 phase: scaling and funding Indian entrepreneurship to build global champions. To enter a different orbit of globally relevant success requires fuel of a different quantum. Innovation needs capital, and the scale of capital determines the scale of ambition.

While India has risen to become the world’s third-largest startup ecosystem by the number of companies, we are only 20th in the depth of funding. In 2024, India attracted $13.7 bn in VC funding. The US deployed $210 bn, China nearly $35 bn. Even more striking, 95% of India’s deals were below $50 mn, funding incremental plays rather than moonshots. Without capital depth, we risk stagnating in incremental innovation rather than breaking out into the next frontier of global leadership. Other nations addressed this long ago.

US seeded the internet, GPS and mRNA vaccines through Darpa – innovations that later spawned trillion-dollar industries.
China invests 2.4% of GDP in R&D, the US 3.4%. India? Barely 0.7%.
Unless we fill this gap with large pools of patient domestic capital, our best founders will either undershoot their potential or will build breakthroughs elsewhere – in San Francisco, Singapore or Dubai, not in India. How can we overcome this challenge? A ₹1    lakh cr Bharat Fund of Funds (FoF) for Technology Startups – an anchor vehicle that can catalyse India’s next wave in AI, semiconductors, biotech, climate tech, defence and space. These are not just high-growth sectors, they are of strategic national importance. Other countries show what is possible.Israel’s Yozma programme in the 1990s matched state and private capital, and is credited with transforming Israel into a startup nation.
Singapore’s Temasek has anchored long-term bets in biotech, AI and cybersecurity, giving its domestic ecosystem the confidence to scale.
We know this model works in India as well. GoI’s ₹10,000 cr FoF, managed by Sidbi, has backed over 150 AIFs, which, in turn, deployed ₹23,000 cr into more than 1,000 startups. This catalytic effect is well-documented: ₹1 of anchor capital was multiplied into ₹2-3 of private money. A 10-fold scale-up to ₹1 lakh cr could unlock ₹3-4 lakh cr of private capital, drawing in domestic insurers, pension funds and mutual funds that have so far stayed away from venture as an asset class. With adequate capital support, India could see the emergence of multiple global-scale companies in semiconductors, clean energy, life sciences, defence tech and AI – sectors that will help build strategic heft for India. By conservative estimates, a fund of this scale could enable 10-15 mn new jobs in a decade and strengthen India’s economic resilience.

The timing is critical.

India now produces more than 1 mn engineering graduates every year. Microsoft, Google and Samsung operate some of their largest R&D centres outside their own countries here.
First-gen Indian founders have listed their companies, proven large-scale exits and demonstrated value creation.
The world is more insular than ever, seeking innovation hubs with political stability, openness, neutrality and demographic strength. India embodies all these qualities, positioning it to emerge as a global technology leader.
A ₹1 lakh cr Bharat FoF for Technology Startups would also send a strong signal to global capital providers that India is serious about scaling its innovation economy.

Just as Aadhaar and UPI became templates adopted by other countries, a Bharat FoF could establish a model for transformative, innovation-centric financing in emerging markets. This fund also presents an opportunity to encourage Indian founders to aim for moonshots, and to make India a jurisdiction of choice for the best founders of the ‘global south’ to incubate and grow their innovations.

Critics worry that a large state-backed fund could distort markets. But an FoF does not invest directly in startups. Rather, it backs professional fund managers who deploy capital in performance-linked tranches to align with the natural pace of the ecosystem. With independent oversight, institutionalised governance and reinvested returns, it creates a diversified virtuous cycle, with successful exits replenishing the corpus, ensuring continuity across decades. Far from distorting the market, such a design would deepen and institutionalise it. Crucially, domestic institutions would, over time, gain the confidence and expertise to invest more directly in technology ventures.

For a $4 tn, or ₹350 lakh cr, economy, ₹1 lakh cr spread over 10-15 years is not a cost – it is an investment in India’s future. A future where we write the rules, build the stage and lead boldly, instead of watching others seize what is ours to shape. Indian entrepreneurs have proven what’s possible with limited resources. Paired with a capital of equal scale, there are no limits to what we can achieve. The time to act is now.

(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)