RDI Fund draws 200 applications; venture capital firms dominate entries

The government has received nearly 200 applications for second-level fund managers under the RDI Fund, with venture capital firms accounting for around 80 per cent

The government has received nearly 200 applications for empanelling second-level fund managers under the research, development, and innovation (RDI) fund.

 

Interestingly, investors have shown more interest in deploying capital through the fund as around 80 per cent of the applications came from venture capital (VC) firms. 

 

Speaking exclusively with Business Standard on the sidelines of the TiE Delhi-NCR's Capital Connect event last week, Jyoti Sharma, head of the RDI cell at the Department of Science and Technology (DST), said, “We have received an overwhelming response as around 200 second-level fund managers have applied. We are just in the process of evaluating their applications and maybe within the next six-eight weeks, we will announce the first lot.”

 

Commenting on the applicants, Sharma added, “I can only say that almost all top fund managers have applied, and nearly 80 per cent of applications are from VCs.”

 

Notably, a few VCs who have applied for the fund include Mela Ventures, 3one4 Capital, Speciale Invest, Celesta Capital, and Wyser Capital, among others. 

 

The concerned ministry has not decided how many second-tier managers it will select. However, according to the available documents, there can be future rounds where it can invite fresh applications. 

 

Based on the implementation guidelines for the fund, the second-level fund managers can be alternative investment funds (AIFs), development financial institutions (DFIs), non-banking financial companies (NBFCs), and focused research organisations (FROs).

 

They will be selected using the quality and cost-based selection (QCBS) method.

 

Here, the government will assign an 80 per cent weight to quality, which refers to the competence to support companies, including startups, in scaling RDI-intensive technologies. The second parameter will be the cost criteria, weighted at 20 per cent. It would refer to the management fees and carried interest charged to RDIF. 

 

The RDI fund worth ₹1 trillion was launched last year, and DST is the nodal ministry for the fund. 

 

BIRAC, TDB as second-tier managers

 

While the government is analysing applications for second-tier fund managers, it had earlier selected two FROs — the Technology Development Board (TDB) and the Biotechnology Industry Research Assistance Council (BIRAC) — on a nomination basis.

 

Last month, both the organisations announced the first call for proposals from startups and corporate houses. 

 

According to people aware of the developments, TDB has zeroed in on the first set of finalists, which includes six companies. It is likely to announce their names this week.

 

“We have selected six projects in various areas such as med-tech, energy, and space-tech to name a few,” a source said. 

 

Likewise, BIRAC has also short-listed five bio-tech startups and is likely to make a formal announcement in the next 7-10 days.