India’s ₹1 lakh crore RDI Fund sparks questions over transparency and accountability.
India’s ₹1 Lakh Cr RDI fund, aimed at unlocking patient capital for deeptech startups, has hit a hurdle due to allegations of opaque processes in its maiden allocation. A report found that 15 out of the 22 companies selected in the first round shared investment ties with seven members of the selection panel, sparking concerns of conflicts of interest.
The government has responded to these allegations, stating that conflicted members disclosed their interests and had zero involvement in evaluating or approving the proposals. However, critics argue that disclosures and recusals may not be adequate protection against such conflicts of interest.
Deeptech founders have also alleged that the application process was not communicated widely, and the first-come, first-serve policy may have favored startups already connected to the ecosystem. Emerging fund managers have raised concerns over RDI’s fund-of-funds scheme, suggesting that the first cohort appeared to have favored experienced managers with larger networks and stronger fundraising records.
The upcoming allocations will be a test for the RDI fund, with stakeholders believing that they need to support emerging managers and early-stage deeptech ventures. Greater disclosure of interests, evaluation criteria, and allocation decisions could help restore confidence, while independent oversight may strengthen credibility.
Source:
Inc42
