Indian space technology launches with record funding

The most important information:–

The Indian Space Tech startup ecosystem has achieved a record funding amount of $126 million in 2023, up 7% from the $118 million raised in 2022 and a staggering 235% increase from the $37.6 million raised in 2021.
– There are currently over 100 space technology startups operating in India, with most of them founded in the last five years.
– Skyroot Aerospace was the startup with the highest funding, amounting to USD 99.8 million, followed by Pixxel (USD 71.7 million) and Agnikul (USD 61.5 million).
– Bangalore is the best-funded city in the Indian space technology sector, followed by Hyderabad and Chennai.
– The largest investors in this sector are Speciale Invest, Anicut Capital and GrowX Ventures.

The space technology sector in India is witnessing remarkable growth, fueled by significant government investment. The recent Union Budget allocated INR 1,000 crore to support space technology startups, with the aim to boost the sector’s growth and attract further investments. This initiative, along with the establishment of the Indian National Space Promotion and Authorization Centre (IN-SPACe) in 2022, is expected to drive significant innovation and growth. Tracxn’s Space Tech Geo Report 2024 provides a comprehensive view of the space technology sector in India, focusing on recent trends, funding dynamics, and key developments.

The Indian space technology sector saw a record funding of $126 million in 2023, up 7% from 2022 and 235% from 2021. Despite the global funding slowdown, the Indian space technology sector continues to grow, fueled by significant government support and significant innovation.

India has emerged as a formidable player in the global space technology arena, with over 100 space technology startups, most of which were founded in the last five years. The Union Budget funding of INR 1,000 crore is expected to further boost the industry, attracting more entrepreneurship and investments in the coming months. India currently boasts of 55 active space assets, including communication, meteorological and Earth observation satellites.

The funding landscape for the Indian space technology sector is predominantly driven by early-stage investments. In 2023, early-stage rounds attracted $120 million of the total $126 million raised, reflecting a significant increase from $114 million in 2022. Seed-stage funding also saw a significant increase, from $4.3 million in 2022 to $5.3 million in 2023, an increase of 24%. However, the ecosystem of private sector participation in Indian space technology startups is yet to witness late-stage funding.

Skyroot Aerospace is the highest-funded active space technology startup in India, with $99.8 million, followed by Pixxel with $71.7 million and Agnikul with $61.5 million. The highest-funded business models in this space include Small Satellite Launch Vehicles, Satellite Imaging Services, and Satellite Communication Services. The Small Satellite Launch Vehicle segment has raised $168 million so far, with Skyroot having raised the highest funding in this category.

Despite the dynamic funding landscape, 2024 has seen no acquisitions so far. The only acquisition so far is Arya’s purchase of Prakshep, a satellite imagery provider to the agriculture industry, in 2022. Moreover, the sector has yet to witness the emergence of unicorns. MTAR and Ananth Technologies are the only public companies in this space.

Neha Singh, Co-founder, Tracxn, commented on the report, saying, “The Indian space technology sector is growing rapidly, supported by strong government support and a vibrant startup scene. The significant funding and strategic investments that we are seeing now are setting the stage for India to become a major player in the global space industry. Looking ahead, we expect the sector to attract even more investment, spurring more innovation. A combination of solid early-stage funding and supportive government policies will be key to fueling this growth and establishing India as a leading hub for space exploration and technology.”

The privatization of the space sector has seen a multi-fold increase in activity. The International Astronautical Federation awarded India the prestigious World Space Award for the successful launch of Chandrayaan 3, which made history in 2023 as the first mission to achieve a soft landing on the lunar South Pole. This groundbreaking achievement set a global standard for India’s capabilities and cost-effective engineering in the space technology industry.

Bangalore leads the way as the most funded city in the Indian space technology sector, followed by Hyderabad and Chennai. Bangalore-based startups have contributed over 55% of the total funding in this space, and it is also the city with the most space technology startups. Top investors in this space include Speciale Invest, Anicut Capital, and GrowX Ventures. Anicut Capital, LetsVenture, and Rosmerta Technologies have been the leading seed investors in the past two years, while Ban Labs, Anicut Capital, and Artha Venture Fund have emerged as the top early-stage investors in the same period.

The evolution of the space industry underscores a global shift from government control to private-sector collaboration. The United States, a pioneer in privatizing its space industry with the Commercial Space Launch Act of 1984, has benefited greatly from private contributions through NASA’s Artemis program. Federal funding for NASA has steadily increased, with $24.8 billion earmarked for the 2024 budget. In terms of geographic funding, the United States remains the leader in funding for space technology startups, although it has declined from $5.5 billion in 2021 to $660 million in 2024.

Europe has seen a surge in funding in the space technology sector, with $407 million raised in 2024 so far, following a record $512 million in 2023. The UK, despite funding fluctuations, is showing signs of recovery with $135 million raised in 2024 so far. Similarly, the UK has invested €50 million in its positioning, navigation and timing (PNT) sector since 2017, using a hybrid model that leverages private technology for space missions.

In recent years, the European Space Agency (ESA) has moved to a competitive model, inviting more private players to develop and launch space missions. This strategic change aims to attract private investment and boost entrepreneurship in the region. Despite the existence of ESA, countries such as Germany, Italy and France maintain their space research agencies, cooperating with ESA. ESA’s budget for 2024 is $8.3 billion, an increase of 10% compared to the previous year, with significant contributions from Germany, France and Italy. A significant part of this budget is allocated to Earth observation operations (30%), followed by space transportation and navigation.

The space technology sector in India is growing rapidly, fueled by government support and a vibrant startup ecosystem. Significant funding and strategic investments are positioning India to become a major player in the global space industry, with expectations of attracting more investments and spurring further innovation.