India’s ₹1 lakh crore Research, Development and Innovation Fund was designed to bring more patient capital into deeptech. But venture capital firms hoping to tap the scheme are still waiting for allocations, and the delay is beginning to affect fundraising plans.
Nearly 20 venture funds are understood to be in the first round, including Speciale Invest, Chiratae Ventures, Ideaspring Capital, Blume Ventures, IvyCap Ventures and Kalaari Capital. Several have already gone through presentations and evaluation, but the first set of selected fund managers is still awaiting formal allocation.
The delay matters because the government can contribute up to 50% of a selected fund’s corpus. That backing can help deeptech investors bring other limited partners on board, especially in sectors where startups need large amounts of capital and longer timelines to reach commercial scale.
The RDI Fund itself has already started deploying money through another route. In May, the Technology Development Board signed agreements with five deeptech companies and released the first ₹50 crore tranche to Bengaluru-based Eyestem Research. TDB has said 22 companies were selected in its first cohort.
That selection has also faced scrutiny over links between some recipients and members of TDB’s investment committee. The government has rejected suggestions of impropriety, saying members must disclose conflicts and recuse themselves from discussions and voting where required.
For the venture ecosystem, the bigger issue now is timing. Deeptech funds need patient investors before they can provide patient capital to startups. Investors are now waiting to see how quickly the RDI Fund’s promise translates into actual commitments to the funds expected to carry much of that capital forward.
Filed by
Startup Unplugged
