Innovation funds: Real deal or just a fancy label?

Summary: Innovation funds promise exposure to game-changing companies. But how different are they really from your regular equity funds? This deep dive looks past the labels to see whether these new funds are genuinely unique—or just a clever repackaging of the usual suspects. Innovation funds sound exciting. After all, who wouldn’t want to back the next Infosys or Info Edge, companies that have richly rewarded shareholders? But beneath the flashy label, are these funds really investing in something radically different or just remixing regular equity holdings? Let’s dig deeper. What are innovation funds? Innovation funds claim to back “innovative” companies, but what qualifies as innovation varies. Most define it broadly as the creation or adoption of new products, services, processes or business models driving long-term change. This can mean: Product or service innovation through R&D and market redefinition Operational innovation that improves efficiency or customer experience Business model shifts that challenge industry norms Stages of innovation: From early R&D and prototyping to launch and large-scale commercialisation, all phases can qualify. In short, these funds back companies that reshape their industries or create entirely new ones by leading innovation or quickly adapting to it. Category snapshot There are currently 11 innovation funds. None existed five years ago, underscoring how new this space is. As of June 30, 2025,