Rocket Science and Beyond: India’s Bold Leap in Space-Tech Innovation

Why Space-Tech Matters for India

India has always harbored a deep fascination for the cosmos, demonstrated by its pioneering space missions such as Chandrayaan-3, which recently achieved a historic soft landing on the Moon’s south pole—an achievement no other nation had accomplished at the time. From humble beginnings in the 1960s, when rocket components were transported on bicycles, to becoming one of the world’s most cost-efficient space agencies, India’s journey has been a testament to its ingenuity. Today, the Indian Space Research Organisation (ISRO) executes missions at a fraction of the cost of global counterparts, with the Mars Orbiter Mission (Mangalyaan) famously costing less than the production of a Hollywood movie like Gravity.

This success story has catalyzed a new wave of entrepreneurial energy in private players. Since 2020, over 140 SpaceTech startups have emerged in India, leveraging the liberalization of space policies and ISRO’s legacy of cost-effective innovation. These startups are tackling global challenges with cutting-edge solutions—be it Skyroot Aerospace’s affordable launch services, Pixxel’s hyperspectral imaging satellites, or Agnikul Cosmos’s modular rocket technology. With Indian startups attracting $126 million in funding in 2023—marking a 235% surge from 2021—the SpaceTech ecosystem is poised for explosive growth, solidifying India’s position as a global SpaceTech hub.

The dividends of this success are visible not only in space exploration but also in transforming life on Earth. SpaceTech contributes directly to critical sectors such as agriculture, urban planning, and disaster management. For instance, Earth observation technologies help farmers monitor pest infestations or assess crop losses due to drought, while satellite data supports real-time disaster response and efficient resource planning.

Growth Drivers

Several factors are fueling rapid growth and making the sector more accessible to new startups.

Reduction in Launch Costs Advances in reusability and manufacturing have reduced the cost of launching payloads, making it feasible for startups to deploy small satellites. For instance, SpaceX has decreased launch costs through reusable rocket technology, and India’s Skyroot Aerospace has made significant progress in affordable launches with its Vikram series, targeting small payloads with 3D-printed components and modular systems. This allows small businesses and research institutions to afford dedicated satellite launches, fueling innovation in data-driven sectors like environmental monitoring and agriculture.

Demand for Smaller Satellites The demand for smaller, purpose-driven satellites is also rising, facilitating rapid data gathering across industries. Constellations of small satellites have unique applications, ranging from real-time climate monitoring to providing internet access in remote areas. Planet Labs, which operates a fleet of Earth-observing satellites, delivers up-to-date global images that aid industries like insurance, agriculture, and urban planning.

Technological Innovations Hyperspectral imaging, which offers data across multiple spectral bands beyond human vision, is one noteworthy example. Indian startup Pixxel uses this technology to provide insights into soil health, water quality, and pollution levels, helping industries make environmentally informed decisions. Further advancements in data processing, miniaturization, and automation are shaping new applications and business models for space data.

Government Initiatives and Regulatory Support Government initiatives and regulatory support have significantly accelerated SpaceTech growth. In 2020, India liberalized its space policies, inviting private participation and establishing organizations like the Indian National Space Promotion and Authorization Center (IN-SPACe) to facilitate private-sector collaboration. India’s recent government reforms have been instrumental in driving SpaceTech growth, notably through the allocation of a substantial ?1,000 crore venture capital fund in the 2024–25 budget. Initiatives by NSIL and ISPA also facilitate private-sector involvement, enabling companies to scale and innovate with fewer regulatory and financial barriers. This positive regulatory environment provides clarity and fosters confidence, encouraging both Indian and international investors to back startups innovating in SpaceTech.

Key Areas of Focus and Innovations

1. Launch Services Startups are creating cost-effective solutions tailored for small satellite payloads, disrupting the $15 billion global market for launch services and enabling broader accessibility to space. Indian startup Agnikul Cosmos exemplifies this with its Agnibaan rocket, a customizable, small-scale launcher designed for on-demand missions. Agnibaan's modular design allows for 3D-printed engines, reducing manufacturing costs and making satellite deployment more flexible for clients.
2. Earth Observation and Remote Sensing Earth observation and remote sensing have transformed industries by providing precise, actionable data. This sector, valued at $7 billion globally, is poised to grow to $15 billion in the next decade, with innovations across markets worldwide. PierSight is developing a constellation of satellites equipped with Synthetic Aperture Radar (SAR) and Automatic Identification System (AIS) technology to provide real-time maritime surveillance, enabling sectors such as shipping, defense, and environmental monitoring to track vessels, prevent illegal activities, and monitor oceanic conditions. Another notable player is GalaxEye, which combines data from multiple sensors, including radar and optical sources, to create high-resolution, multispectral imagery.
3. Satellite Communication and Broadband Internet The push to connect remote regions to the internet has gained momentum. Companies like SpaceX’s Starlink and Astrome use low-Earth orbit (LEO) satellites to deliver high-speed internet to underserved areas, bridging the digital divide in regions with limited or no fiber-optic infrastructure. Innovations in this space are poised to disrupt the $193 billion satellite communication market, which is projected to double in the next decade.
4. Space Services Space services such as debris removal, satellite life extension, and space mining are gaining importance. InspeCity is developing satellite life-extension and servicing technologies, including robotics and propulsion systems, to extend satellite lifespans and improve operational efficiency. Startups like Digantara are developing technologies for debris tracking, helping operators avoid collisions and manage orbital traffic.

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Investment Trends in SpaceTech

Investment in SpaceTech has escalated globally and in India. In the U.S., annual private investment in SpaceTech reached $8 billion by 2020, with players like SpaceX and Rocket Lab leading the charge. Europe and other regions have also increased funding, with targeted efforts to stimulate local innovation.

In India, the impact of deregulation has been profound. Before 2020, Indian SpaceTech attracted limited investment due to regulatory restrictions. By 2023, the sector secured a record $126 million in funding, marking a 7% increase from 2022 and an impressive 235% rise from $37.6 million in 2021. Since the sector opened up, startups like Skyroot Aerospace, Pixxel, and Agnikul Cosmos have collectively raised over $230 million. XDLINX Space Labs raised $7 million in seed funding in October 2024 from investors including Ashish Kacholia, E2MC, and Mana Ventures. In 2024, GalaxEye secured $10 million in Series A funding from MountTech Growth Fund, Anicut Capital, and Infosys Innovation Fund, while PierSight raised $6 million in seed funding from Alpha Wave Ventures and Elevation Capital.?

Chiratae Ventures’ Perspective and Future Opportunities

At Chiratae Ventures, we recognize the transformative potential of SpaceTech and are particularly interested in investing in areas with high potential for disruption.

• In-Orbit Manufacturing and Repair The ability to conduct repairs, refuel, or even manufacture components in space could drastically lower operational costs, extend the lifespan of space assets, and support sustainable practices.
• Hybrid Satellite Constellations Startups creating versatile satellites capable of toggling between functions like communications, Earth observation, and data processing can capture high-demand applications across multiple industries.
• Industry-Specific Analytics Analytics derived from satellite data, particularly for sectors like insurance, agriculture, and finance, could unlock valuable, tailored insights.

SpaceTech offers a unique investment opportunity for venture capitalists. By backing innovative startups, Chiratae Ventures aims to support India’s role in the global space ecosystem, fostering a future where space technology drives economic growth, technological sovereignty, and environmental sustainability.

For check sizes ranging from $0.5 million to $2 million, you can apply to Chiratae's Sonic Program: https://www.chiratae.com/chiratae-sonic or reach out to [email protected] and [email protected].