India advances its initiative to attract private investment into research-focused start-ups by selecting first group of fund managers for its ₹1 trillion R&D fund, signalling a significant shift towards faster execution and deeper private sector engagement.
India’s push to channel more private capital into research-heavy start-ups is moving into a new phase, with a first group of venture capital and alternative investment firms expected to be named soon as second-level fund managers under the government’s ₹1 trillion Research, Development and Innovation fund. According to Business Standard, the shortlist includes names such as IvyCap Ventures, Speciale Invest, Chiratae Ventures and Kalaari Capital, with the first cohort likely to comprise about 20 alternative investment funds.
The selection process has drawn heavy interest. Business Standard reported that nearly 200 applications were received for second-level fund manager roles, with most coming from VC firms. The scheme also allows development finance institutions, non-banking finance companies and focused research organisations to apply. People familiar with the matter said the government has been reviewing proposals for fund sizes of roughly ₹2,000 crore to ₹2,500 crore and could announce a second cohort later this year.
The fund’s design gives the government flexibility to back selected managers by investing as much as 50 per cent of a fund’s corpus as a limited partner. Officials are using a quality-and-cost based selection method, giving most weight to a firm’s ability to support scaling in research, development and innovation-intensive technologies, while also considering fees and related costs. The broader assessment also looks at investment management record, experience with deep-tech companies and success in drawing in private money.
The first cohort comes against a backdrop of growing pressure for faster execution. Aditya Singh, partner and co-founder of All In Capital, criticised the pace in a social media post quoted by Business Standard, saying applications had been pending for months without clear feedback. The article also noted that the Department of Science and Technology had not responded to a query on the timeline. The names under consideration are not newcomers to India’s start-up market: IvyCap has closed a ₹2,100 crore third fund, Speciale Invest has raised a ₹286 crore second fund, Chiratae Ventures closed a $337 million fourth fund and 3one4 Capital launched a $100 million vehicle, while the government has already begun picking the first biotechnology start-ups for direct support under the same wider RDI push.
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