The Centre’s Electronics Development Fund (EDF) has emerged as a significant catalyst for India’s technology and electronics manufacturing ecosystem, facilitating investments worth Rs 1,335.77 crore across 128 startups and companies engaged in electronics system design, manufacturing (ESDM) and information technology. The Ministry of Electronics and Information Technology (MeitY) on Wednesday said the initiative has played a crucial role in promoting indigenous innovation, strengthening the startup ecosystem and attracting large-scale private investments into India’s emerging technology sector.
Established as a Fund of Funds, the Electronics Development Fund was designed to encourage market-driven innovation by providing capital to professionally managed venture capital funds rather than investing directly in startups. These venture capital funds, known as Daughter Funds, subsequently invest in promising startups developing indigenous technologies, products and intellectual property.
The model enables the government to leverage private sector expertise in identifying high-potential startups while ensuring that public investment attracts significantly larger private capital into strategic technology sectors.
Rs 257 Crore Government Investment Unlocks Rs 1,335 Crore Funding
According to MeitY, the Electronics Development Fund had invested Rs 257.77 crore in eight SEBI-registered Daughter Funds as of June 30, 2026.
These eight venture capital funds have collectively invested Rs 1,335.77 crore in 128 startups and companies spread across India’s major innovation hubs.
The ministry highlighted that the EDF has successfully used public funding to unlock much larger investments from private investors, thereby expanding access to risk capital for technology startups working on advanced electronics, manufacturing and digital technologies.
Bengaluru Dominates India’s Startup Investment Landscape
The data released by the ministry shows that Karnataka, led overwhelmingly by Bengaluru, continues to dominate India’s electronics and technology startup ecosystem.
Bengaluru alone accounted for 89 funded companies, attracting investments worth Rs 854.54 crore, representing the largest share of EDF-backed investments in the country.
Other major startup hubs that benefited from the programme include:
Hyderabad: Rs 129.97 crore
Mumbai and Pune: Rs 142.48 crore (combined)
Delhi: Rs 99.20 crore
Chennai: Rs 62.24 crore
Gurugram and Faridabad: Rs 23.87 crore
Kochi and Thiruvananthapuram: Rs 13.30 crore
Jaipur: Rs 7.50 crore
Noida: Rs 1.85 crore
Kolkata: Rs 0.75 crore
The geographical spread indicates that while Bengaluru remains India’s leading technology hub, innovation ecosystems are steadily expanding across multiple cities, supported by targeted government initiatives and venture capital participation.
Focus on Electronics Manufacturing and Indigenous Technologies
Among the 128 supported companies, 77 startups operate in the Electronics System Design and Manufacturing (ESDM) sector, while the remaining 51 companies are engaged in information technology.
The emphasis on ESDM aligns with the government’s broader vision of strengthening domestic electronics manufacturing, reducing import dependence and positioning India as a global technology and semiconductor hub.
According to MeitY, startups receiving support under the programme were selected after evaluating several parameters, including:
Innovation capability
Indigenous technology development
Intellectual property creation
Technical expertise of founding teams
Scalability of products and services
Commercial viability of business models
The ministry said these criteria ensured that funding reached startups capable of building globally competitive technologies while contributing to India’s long-term technological self-reliance.
Professional Fund Management Model
The Electronics Development Fund operates through a professionally managed investment structure.
Canbank Venture Capital Funds Ltd. (CVCFL) serves as the fund manager, while the Ministry of Electronics and Information Technology acts as the anchor investor.
The fund manager oversees the performance of the Daughter Funds, ensuring compliance with investment objectives and monitoring fund utilisation. Meanwhile, the Daughter Funds regularly assess the operational performance of the startups, tracking technology development, commercial growth and market expansion.
This layered investment approach combines government support with professional venture capital expertise, reducing investment risks while improving the chances of identifying high-growth technology companies.
Government Investment Attracts Nearly Five Times More Private Capital
One of the most significant achievements of the Electronics Development Fund has been its ability to crowd in private investment.
According to the ministry, the Daughter Funds leveraged EDF support to mobilise nearly five times the government’s initial investment from the market.
The multiplier effect demonstrates growing investor confidence in India’s electronics and technology startup ecosystem and highlights the role of public funding in encouraging private participation in sectors that often require long-term, high-risk investments.
Startups Raise Over Rs 22,553 Crore
Beyond the direct investments made through the Daughter Funds, the startups supported under the Electronics Development Fund have collectively raised approximately Rs 22,553.82 crore from various investors.
The ministry described this as evidence that EDF-backed companies have succeeded in attracting substantial follow-on funding from domestic and international venture capital firms, institutional investors and strategic partners.
The ability to raise large volumes of capital is considered a key indicator of commercial success and investor confidence in the technologies being developed by these startups.
373 Intellectual Properties Created
The ministry also highlighted the innovation outcomes of the programme.
The supported startups have collectively created or acquired 373 intellectual properties (IPs), including patents and other technology assets.
The creation of intellectual property is a critical objective of the Electronics Development Fund, as it encourages the development of indigenous technologies, strengthens India’s innovation ecosystem and improves the country’s competitiveness in advanced technology sectors.
The government has consistently emphasised the importance of building domestic intellectual property as part of its broader Atmanirbhar Bharat and Make in India initiatives.
Fund Enters Divestment Phase
MeitY said the Electronics Development Fund completed its investment phase in February 2024 and has now entered the divestment phase.
During this stage, investments made through the Daughter Funds will gradually mature, with returns expected to be realised through exits such as acquisitions, public listings or other investment mechanisms.
The ministry noted that while fresh investments under the existing fund have concluded, the impact of the programme continues through the growth of supported startups, continued innovation and the broader strengthening of India’s electronics manufacturing and technology ecosystem.
With over Rs 1,335 crore invested, 128 startups supported, Rs 22,553 crore mobilised, and 373 intellectual properties created, the Electronics Development Fund has emerged as one of the government’s flagship initiatives for nurturing innovation, encouraging indigenous technology development and accelerating India’s ambition to become a global leader in electronics design, manufacturing and digital technologies.
