Govt's RDI Fund backs Bengaluru's Peptris with Rs 86 crore for AI-discovered drugs

The Technology Development Board (TDB), which works under the Department of Science and Technology, signed an agreement on Monday, 12 October 2026 to provide about Rs 86 crore to Bengaluru start-up Peptris Technologies for developing medicines discovered with artificial intelligence. The money comes from the government's Research Development and Innovation (RDI) Fund as optionally convertible debt and covers half of a Rs 172 crore project called VIGOR, which aims to move four of the company's drug candidates closer to human trials over three years.

Drug development is one of the most expensive and slowest businesses a start-up can enter. Moving a molecule from the computer screen into the laboratory, then into animal studies and finally into human trials can take years and hundreds of crores of rupees, and most candidates fail along the way. Venture investors in India have been wary of funding that long, risky middle stretch, which is why many promising Indian biotech ideas stall or are sold abroad early. The RDI Fund was set up to fill exactly this kind of gap with patient, high-risk money for private companies.

The form of the support matters for founders watching the scheme. Optionally convertible debt means the money can be repaid like a loan or turned into a shareholding later. That gives the government a share in any success, while the company does not have to give up equity upfront at a low early valuation. The deal also shows the RDI Fund moving from announcements to signed agreements with individual start-ups, which is the step founders need to see before they apply.

For India's start-up ecosystem, the choice of an AI drug discovery company is a signal of the kind of deep technology the government wants to back. India is already a major maker of generic medicines, but it has produced few original drugs. Companies like Peptris are trying to use computing to design new molecules faster and more cheaply, and public money at the preclinical stage could help them reach a point where private investors and pharmaceutical partners are willing to take over.

The usual caution applies. Readiness levels 4 to 6 still sit before human trials, so none of the four candidates is close to reaching patients, and many drug programmes fail between these stages.

Short-term: Peptris can fund preclinical studies and validation work on four candidates without raising an equally large private round immediately, and can expand its research team.

Long-term: If the candidates progress, the deal could become a model for how the RDI Fund backs high-risk Indian deep-tech, giving more founders a route to finance research that venture capital alone avoids.

Who is affected: Deep-tech and biotech founders looking for non-dilutive or patient capital, Indian pharmaceutical companies that may license new molecules, investors in AI and life sciences start-ups, and, in the long run, patients if any of the medicines succeed.

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