The Indian spacetech startup sector has always been viewed with scepticism by investors. But that is no longer the case. Due to a variety of factors, including the Indian government’s decision to open up the spacetech industry to private operators, decreasing costs to build and launch satellites, proof of returns on investments, obvious market need for geospatial data, and technological breakthroughs in space, investors are now considering the space as a feasible venture.
Last week, two Indian spacetech startups, Agnikul Cosmos and Skyroot Aerospace, each reported that they had raised $11 million in a Series A fundraising round, the most amount raised by Indian private space sector operators in a single deal to date. This comes after Pixxel, a small satellite startup, raised $7.3 million in investment money in March of this year, while Vesta Space raised $10 million from US-based investor Next Capital in 2020.
To be sure, this is part of a wider global trend, as investors throughout the world become increasingly optimistic about the field as more and more success stories surface.
According to Seraphim Capital, a global specialized investment organisation focused on the space industry, overall private equity investment in the sector in the first half of 2021 is expected to be more than twice that of 2020, despite a 95 percent rise in investments the previous year. According to Seraphim Capital research, venture investment in the area was $2.7 billion in the first quarter of 2021, compared to $1.6 billion in the corresponding period last year.
According to YourStory Research’s review of announced agreements, Indian spacetech entrepreneurs have raised about $31 million in funding so far this year in 2021. This represents a 70% increase over the $18.2 million raised by the sector in all of 2020, and nearly a nine-fold increase over the $3.7 million raised in 2019.
Agnikul Cosmos, whose key product, Agnibaan, is a small satellite launch vehicle, capable of transporting up to 100 kg of payload to low earth orbits, has personally experienced the increasing consumer interest in space.
Agnikul Cosmos, which was founded by Srinath Ravichandran, Moin SPM, and Prof SR Chakravarthy, has raised money in each of the previous three years — an undisclosed sum in 2019, $3.2 million (as revealed) in 2020, and $11 million (as reported) in 2021.
“With each passing year, only founder investor interest in the area grows. The opening up of the spacetech sector and government assistance are two major drivers”, according to Agnikul CEO Srinath Ravichandran. “Investors around the world have finally realised that if they invest in spacetech, they can anticipate returns and that it is not just a gamble,” he added.
Finance Minister Nirmala Sitharaman declared in May 2020, that commercial businesses would be allowed to participate in the space sector. In June of that year, the Union Cabinet announced the establishment of an autonomous nodal body, the Indian National Space Promotion and Authorisation Centre (IN-SPACe), as an extension of ISRO, with the goal of involving private firms in space-related activities.
