Boom in space tech startups
Indian space technology start-ups are soaring to new heights. Funding into Indian space technology startups increased by 198.67 per cent in 2021 . This touched $67.2 million across 11 rounds, up from $22.5 million in 2020 across nine rounds, according to a media report.
The major space tech start-ups which raised funding last year are satellite-based services and applications start-ups Pixxel, Astrome and Dhruva Space. The other top firms to raise funds were Space launch vehicle manufacturing start-ups AgniKul and Skyroot. Pixxel is the highest funded start-up among all.
According to the Economic Survey 2022, 2021 saw 47 new spacetech start-ups launching in the country. In 2020, it was 11 and seven in 2019. This took the total number of active space tech start-ups in India to 101.
According to space industry experts, the opening up of the space sector to private companies through a slew of policy changes by the government proposed in mid-2020s is the main reason for this funding rush.
Pixxel, a major player
“We have started seeing a few successes in the spacetech sector globally, especially with SpaceX. A lot of these early-stage funding is also trickling down from there. The FDI flowing in India gives a lot more confidence about the sector as the Indian space industry already has so much heritage. The acceptance by the government in mid-2020 with the announcement of opening up the space sector to the private sector companies happened which led to this funding jump,” Awais Ahmed, Founder and CEO, Pixxel was quoted as saying by Business Line.
Reports say that Pixxel will launch its first phase of satellites with ISRO’s launch vehicles in the next few months. Currently, the firm is focussed on providing satellite-based Earth imaging solutions for the agricultural sector. It is already working for 50 plus clients globally, using drones to provide solutions at the moment.
Jatin Desai, Managing Partner, Inflexor Ventures which has invested in propulsion systems start-up Bellatrix Aerospace told Business Line that, “This is not a one-year phenomenon, it has developed over the past few years. Overall, the global trend of privatisation of space tech and the NASA model of having their core functions and then outsourcing certain technology and parts from other companies. So, participation of the private sector in space tech is complimenting bigger government programmes worldwide especially in the developing countries.”
“Right now, we require clarity and finalisation of these policies. Policy assurance is very critical for this sector to develop. The second issue that needs to be looked into is the clarity on FDI forces. When these start-ups go to the second level of development, the requirement of funds will be higher. Each company will be looking at $10-20 million in funding and that necessarily won’t come entirely from within the country,” Lt Gen. A.K. Bhatt (Retd.), Director-General, Indian Space Association ( ISpA) was quoted as saying.
Funding issue
Ahmed further said, “Funding is still an issue with the Indian space tech start-ups. Early stage investing in this sector has opened up very well. Most of these are Indian funds which have put in money, but in the later stages where the start-ups have to raise tens and hundreds of millions of dollars, there is still a lack of options here in the country, that money needs to be brought from abroad.”
