India's Space Odyssey and The New Frontier of Tech Startups: Tracxn Report The global space technology startup stage experienced a slowdown, while the Indian counterparts enjoyed a healthy upward funding trend.
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The booming Indian tech sector, after experiencing a certain IT boom in the 1970's has been foraying into technology with applications out of this world. One such sector is space tech, in the backdrop of the state-backed ISRO's success on the global stage, startups are putting on a show as well.
The International Astronautical Federation awarded the coveted 'World Space Award' to India for its successful launch of Chandrayaan 3. India made history by becoming the first country to achieve a soft landing on the moon's south pole, setting a precedent for the country's vast potential and cost-efficient ways of developing technology.
The country is now home to more than 100 startups, most of which were founded in the last 5 years, according to a detailed report called 'Tracxn Feed Geo Report Space Tech-INDIA' from Tracxn Technologies. The global space technology startup stage experienced a slowdown, while the Indian counterparts enjoyed a healthy upward funding trend.
The report believes the sector is experiencing a positive buzz after its privatization. The government also has a keen interest in space as the Union Budget released in 2024 allocated INR 1000 crore to support government-recognized space tech startups across the country. As of date, India possesses 55 active space assets including communication satellites and meteorological and earth observation satellites.
Sector view
The report reveals that 2023 served as the year with the highest funds pouring in, totalling USD 126 Million which is a 7 per cent increase from 2022, and a whopping 235 per cent increase compared to 2021.
Early-stage startups attracted the majority of the available funds with USD 120 Million. Seed-stage funding saw a growth of 24 per cent in 2023 with USD 5.3 Million and in 2024 saw USD 2.29 Million invested in seed-stage rounds so far.
In the private sector, Spacetech can be described as nascent and hence has not witnessed big-ticket late-stage funding up until now. Aerospace manufacturer and commercial launch service provider Skyroot is a company founded by former engineers and scientists from ISRO and holds the position of being the highest funded with USD 99.8 Million.
Promising Startups Attract Investors
Among the startups making strides in aerospace manufacturing, Dhruva Space stands out. The company offers satellites coupled with earth stations and launch services as an integrated solution or individually as a technology solution to power Space-based applications, on Earth and beyond. The company has so far raised USD 16.1 Million across 5 funding rounds with leading venture capital firm IvyCap Ventures as one of the investors.
Vikram Gupta, Founder, and Managing Partner of IvyCap Ventures said that as a firm, they expect transformative potential in this sector and with startup-friendly policy support and a further boost in the Budget 2024-25, they remain excited about the potential for high scalable business models in this space.
"We aim to prioritize technologies that will address critical challenges and create sustainable solutions, aiming to drive India's leadership in the global space tech arena," Said Vikram Gupta.
Chennai-based Anicut Capital has emerged as one of the top investors in the Indian Space Tech Sector, alongside Speciale Invest and GrowX Ventures.
Anicut Capital boasts the top spot in Tracxn's report when it comes to most active Private Equity investors with 4 investments in the sector and a portfolio that includes AgniKul, GalaxEye, and InspeCity.
IAS Balamurugan, Co-founder and Managing Partner at Anicut Capital said, "As an investment firm, Anicut Capital is committed to supporting entrepreneurs in pioneering sectors, including spacetech. In the US, approximately 6,000 private companies operate in this domain, while India has about 500, highlighting significant growth potential for IP-driven companies to establish themselves in this segment."
IAS Balamurugan added that they aim to recognize potential early and anticipate increased innovation in areas like reusable launch technology, space stations, and efficient propulsion fuels in the coming years as they seek companies that are IP-driven and are building in India for the world.
Antler India is known to be one of the largest pre-seed investors in the country and has forayed into space tech, via its portfolio company Inspecity.
Inspecity manufactures components for satellites, provides users with a platform for developing components for aerospace and aviation, and also services for orbital habitation, incubation solutions, and hassle-free constellation operation services.
Nitin Sharma, Co-founder and Partner, of Antler in India says that they have been closely monitoring the sector, especially through their portfolio company, Inspecity, the only space-tech startup to win an iDEX grant within one year.
"We are excited by the thesis of how the growth of LEO constellations is likely to create demand for a specialized "in-space logistics" player like Inspecity. Making satellite life extension feasible is a game-changing economic opportunity. We are also excited by other opportunities in capturing earth imaging data and applications of earth observation data," exudes Nitin Sharma.