360 One Asset’s private equity and venture capital arm has launched a 1000 crore fund focused on defence and space sectors. The fund is fully backed by domestic investors and is expected to close within the next two months. It will invest in 15 to 20 companies across the defence and space value chain.
Sameer Nath, chief investment officer and head of private equity and venture capital at 360 One Asset, said the firm may expand the fund further through a greenshoe option. This could make it one of India’s largest funds dedicated to defence and space where funding has traditionally been limited.
Interest in defence and space has been growing. Last year former Citi executive Ravi Kapoor launched Indusbridge Ventures, a 1000 crore aerospace and defence fund. Most India focused defence and aerospace funds remain below 500 crore. Large venture firms such as Peak XV Accel and Lightspeed have participated selectively through single investments in companies like Digantara EtherealX and Pixxel.
The new fund is led by partners Sandeep Maheshwari and Abhishek Nag and has already invested in Digantara CoreEL Technologies and Sisir across Series A pre IPO and late stage private equity rounds. A fifth investment is expected to close soon.
Stronger policy support is helping the sector. Higher foreign direct investment limits rising defence capital spending and initiatives under Make in India and Atmanirbhar Bharat have improved the investment outlook.
Private capital remains limited especially at later stages. Nath said very little venture and private equity money has gone in but both domestic and global investors are expected to increase participation as companies grow.
Maheshwari said the growth outlook for defence and space companies has improved with predictable order flows stronger revenue visibility and rising export demand. Several portfolio companies also have civilian applications which can sustain growth if geopolitical conditions change.
Exports have become an important driver. India’s defence exports rose from 12815 crore in financial year 22 to 23622 crore in financial year 25 with an 84 percent compound annual growth rate. Maheshwari expects exports could reach 50000 crore in the coming years.
Nag added that civilian and export markets are reshaping how large defence companies engage with startups. Many firms are acquiring capabilities rather than building them internally especially in areas where startups move faster or operate closer to the technology frontier.
Defence and space are expected to see acquisitions alongside public listings. Nath said while some portfolio companies may eventually go public others are more likely to find strategic or financial buyers. He added we are not putting all our eggs in the IPO basket.
