Over 100 Indian VCs apply for RDI as deeptech goes mainstream

Synopsis

Over 100 Indian venture capital firms, including Mela Ventures, Blume and Ideaspring, have applied for the government’s Rs 1 lakh crore RDI fund to boost deeptech startups. Managed by the DST, the fund offers loans, equity, or contributions to funds, aiming to expand India’s tech ecosystem.

More than 100 Indian venture capital firms, including Mela Ventures, Ideaspring Capital and Blume Ventures, have applied for the government’s Research, Development and Innovation (RDI) fund as they double down on deeptech investments, multiple investors told ET.

The RDI fund, with an outlay of Rs 1 lakh crore, will function as a fund of funds to catalyse private investments in deeptech and R&D-focused startups over a period of six years, in addition to loan financing to startups.

VCs that have applied for the scheme include 3one4 Capital, Chiratae Ventures, Wyser and Waterbridge Ventures.

While over 100 funds have applied, investors said it is unlikely that all the funds will receive approval. Successful applicants can use the government allocation to invest in deeptech startups.

The initiative could result in “manifold expansion in the number and quality of deeptech companies in India,” Arpit Agarwal, investment partner at Blume Ventures, told ET. “We confirm that we have applied for the funding as part of this scheme, hoping to expand our footprint in this area,” he said.

Vishal Katariya of Ankur Capital said RDIF will allow VCs to expand their funding pool and add to the growth capital. “For the deeptech funds, growth capital is a challenge. This will help in bridging the gap,” he added.

As per the Department of Science and Technology (DST), which is handling the scheme announced in the July 2025 budget, the fund will be distributed in the form of loans at low or nil rates, equity in startups, or contribution to deeptech fund of funds.

The DST opened applications for the RDI fund in January.

Initiatives such as RDI and IndiaAI mission are steps to create a sustainable tech ecosystem that can foster innovation like in the US and China where the governments have invested billions in science and technology.

“The government has been opening newer avenues for raising funds, such as Pension Fund Regulatory and Development Authority (PFRDA), where they can invest a corpus of 5% in VC funds, and the latest being RDI,” said Krishnakumar Natarajan, managing partner at Mela Ventures. “All these encourage investments in the deeptech sector, which is important.”

He confirmed Mela Ventures has applied for the RDI fund.

Wyser also confirmed applying for the fund, while other VC firms did not respond to ET's email seeking confirmation.

Manish Kheterpal, managing partner at Waterbridge Ventures, said RDI is for the deeptech ecosystem what Sidbi (Small Industries Development Bank of India) was for the startup ecosystem over the last decade. Sidbi’s fund of funds started with Rs 10,000-crore corpus and has helped catalyse over Rs 80,000 crore (8x capital) in over 150 funds across the country.

About 50% of Waterbridge Ventures’ investments are in the deeptech domain.

Pranav Pai, managing partner at 3one4 Capital, said that while the initiative has come in late compared to other top five economies, it is a strategically vital move.

In the current geopolitical situation, all it takes is a sanction or energy blockade to isolate a country, he noted. India has already suffered the “guilty by association” treatment before and must not risk sovereign self-reliance to bureaucratic delays. A delay at a time when the world is moving inwards will have an impact, Pai told ET.

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