More jobs, investment: Space industry welcomes Rs 1K crore VC fund

Industry welcomes move to expand the space economy to $44 billion by 2033

The space industry on Thursday welcomed the Rs 1,000 crore Venture Capital Fund for the sector, which is likely to benefit around 40 startups, saying that the move will attract investments from the private sector and generate employment.

 

The fund is planned for a time period of up to five years from the actual date of start of fund operations. The indicative range of investment proposed as part of the fund will be around Rs 10-60 crore, contingent upon the stage of the company, its growth trajectory, and its potential impact on national space capabilities.

 

A company in its growth stage will be getting between Rs 10-30 crore, while the one in late growth stage will be getting around Rs 30-60 crore. Based on the above investment range, the fund is expected to support approximately 40 startups. The average deployment amount could be Rs 150-250 crore per year, depending on the investment opportunities and fund requirements.

 

 

“This initiative by the government is commendable and will greatly strengthen the space ecosystem. Securing capital is vital for the expansion of space companies, and this fund is set to create a significant ripple effect, attracting a wave of private investments, and paving the way for sustained long-term success in the industry," said Pawan Kumar Chandana, co-founder and chief executive officer (CEO) of private space technology company Skyroot Aerospace.

 

Skyroot, one of the most funded startups in the Indian space sector, in November 2022 successfully developed and operated launch vehicle Vikram-1, becoming the first private player to do so.

 

The size of India’s space economy is around $8.4 billion now and the government is targeting to take it to $44 billion by 2033. At present, the space sector in India has around 250 registered startups, since the sector reforms in 2020 resulted in increased private sector participation. 

 

The proposed fund is expected to boost employment in the Indian space sector by supporting startups across the entire space supply chain—upstream, midstream, and downstream. It will help businesses scale, invest in research and development, and expand their workforce.

 

Each investment could generate hundreds of direct jobs in fields like engineering, software development, data analysis, and manufacturing, along with thousands of indirect jobs in supply chains, logistics, and professional services. By fostering a strong startup ecosystem, the fund will not only create jobs, but also develop a skilled workforce, driving innovation and enhancing India's global competitiveness in the space market.

 

It will serve as an alternative investment fund under the Securities and Exchange Board of India regulations, providing early-stage equity to startups and enabling them to scale for further private equity investments.

 

“With all the policy initiatives, one of the foremost requirements of the industry is financial support at this moment. We believe that this fund will not only be a key enabler for growth of Indian space startup ecosystem but will also inspire investors to seriously look at this sector as an investment and come forward to become a part of the Indian space startup story," said A K Bhatt, director general, Indian Space Association (ISpA).

 

The fund will boost investor confidence, attract private capital, and signal the government's commitment to advancing space reforms. 

Scale up support

  Some startups said that while there was initial capital available for  proof-of-concept (POC) or product development through various government schemes, there was lack of capital for the scaleup support and taking the product to market. 

 

“This (new initiative) will give a much needed boost to the startups looking to scale up and expand their infrastructure,” said Ankit Bhateja, co-founder of Xovian Aerospace. “It will also help to create an enabling environment for the growth stage investments by validating the developments done by the Indian space startups thereby attracting more private venture funds to invest in the space sector.”

 

Xovian Aerospace is tapping geospatial and signals (GEOINT and SIGINT) intelligence through its radio-based nano-satellite infrastructure. It aims to provide 24x7 real-time monitoring and analysis, enhancing operational efficiency across various industries.

 

Drive innovation

  Chaitanya Dora Surapureddy, CFO and co-founder, Dhruva Space,  said the government’s new initiative would instil confidence in the investment community to channel funds into India’s thriving private Space sector. 

 

“The allocation of Rs 1000 crore to the approved venture fund under IN-SPACe is poised to drive innovation and strengthen the entrepreneurial ecosystem across the Space industry,” said Surapureddy. “We hope this capital infusion will not only accelerate the ecosystem’s growth trajectory but also enhance our ability to attract additional investments, catalysing a multiplier effect for Dhruva Space’s later-stage development, particularly as we establish our 280,000 sq-ft spacecraft manufacturing facility and fulfil orders for Space missions for global customers, enabling Dhruva Space to compete on the global stage.” 

 

Surapureddy also said, “ I’d like to add that this support enables early-stage and later-stage startups to boldly innovate and pioneer next-gen products. It enables the Space sector to focus on breakthrough technologies and market expansion, allowing us to try and be ahead of the curve in the global market.”

 

Hyderabad-based Dhruva Space’s Satellite Platforms is driving innovation in space exploration and satellite communication. In its space segment, the company develops satellite platforms and subsystems for a range of weights, from 0.5 kg to 300 kg, including CubeSats, NanoSats, and MicroSats. The company also designs spacecraft solar arrays for both manned and unmanned missions. In its launch segment, Dhruva Space is the only Indian private entity with deploys compatible with ISRO’s launch vehicles, including PSLV and SSLV.

 

Another India-headquartered space tech startup, GalaxEye also welcomed the government initiative and said this strategic investment will accelerate innovation, drive indigenous capabilities, and empower startups to push the boundaries of what’s possible in space technology. “With this support, we can look forward to a future where Indian companies are at the forefront of global advancements, fostering a self-reliant space ecosystem that will inspire the next generation of pioneers,” said the company. 

 

GalaxEye delivers high-resolution, near-real-time satellite imagery regardless of weather conditions. The firm is developing the world’s first multi-sensor imaging satellite, known as the Drishti Mission.