The government is set to announce the first cohort of nearly 20 VC firms selected to manage investments under the ₹1 trillion Research, Development & Innovation Fund. According to reports from Business Standard, top VC firms including IvyCap Ventures, Speciale Invest, Chiratae Ventures, and Kalaari Capital are among the first cohort shortlisted under the scheme. The cohort, comprising nearly 20 alternative investment funds (AIFs), is expected to be announced this month, with a second cohort announcement planned for October-November this year. The deadline for submission of applications was January 31, with the selection process taking approximately 8-10 months for some applicants.
The government received nearly 200 applications for SLFMs, with nearly 80% from VC firms alone. As reported by Business Standard, the government can invest up to 50% of the amount in selected AIFs and become limited partners in the fund. The applications received were for fund sizes of around ₹2,000-2,500 crore. Other second-level fund managers eligible to apply include development finance institutions, non-banking finance corporations, and focused research organisations. "Broadly, the government has received applications for fund sizes of around ₹2,000-2,500 crore. The government can invest any amount up to 50 per cent. We have learnt that the government will announce the first cohort this month," a source aware of the developments told Business Standard.
Several prominent VC firms have applied for the fund, including Mela Ventures, 3one4 Capital, All In Capital, Celesta Capital, Wyser Capital, pi Ventures, Translation Endeavours, AdvantEdge, Sixth Sense Ventures, Ideaspring Capital, and Blume Ventures, according to sources cited by Business Standard. The Department of Science & Technology (DST), which is the nodal ministry for the fund, did not respond to queries regarding the selection process. However, some firms have flagged concerns about the slow process, with All In Capital partner Aditya Singh writing on social media: "Funds and founders like us have had applications pending for eight to 10 months. No clarity and answer whatsoever… You do not get to call yourself deep-innovation-first while your committee moves slower than the technology it is funding."
The government is using the quality and cost-based selection (QCBS) method for shortlisting, where it assigns 80% weight to quality and 20% to cost criteria. As reported by Business Standard, the fund evaluates AIFs on three broad parameters: their ability to manage investments and generate consistent returns, experience and capability in backing RDI-intensive technology companies, and success in mobilising private capital. The concerned ministry has not decided how many second-tier managers it will select, with future rounds possible for fresh applications. "The government is using the quality and cost-based selection (QCBS) method for shortlisting, where it assigns an 80 per cent weight to quality, which refers to the competence to support companies, including startups, in scaling RDI-intensive technologies," according to Business Standard.
In the Union Budget 2026-27, Finance Minister Nirmala Sitharaman topped-up the fund with a ₹20,000 crore allocation, similar to last year's budgetary allocation. Unlike the nominated second-level fund managers which include BIRAC and TDB with ₹2,000 crore earmarked for the ongoing financial year, no specific amount has been allocated for AIFs. The fund was launched last year, with the selection process taking approximately 8-10 months for some applicants, leading to concerns about the slow process and lack of communication from the government. The scheme received the Union Cabinet's approval in July last year and was launched shortly thereafter.
