Space start-ups get into a higher orbit

In October 2024, Anirudh Sharma, Co-founder and Chief Executive Officer of Indian space tech start-up Digantara, was invited to New York to discuss issues relating to space traffic coordination, for which there are no rules yet. The six-year-old Indian start-up specialising in space situational awareness services was part of a group of a few private companies that the United Nations Office for Outer Space Affairs had reached out to, to gather technical inputs for a space traffic coordination policy, says Sharma. The policy document is still being drafted and is expected to be discussed further in Vienna in June 2025.

A month earlier, Pixxel, a space data start-up based in Bengaluru, bagged a contract from NASA to provide hyperspectral Earth observation data to the U.S. space agency, other U.S. government departments and academic partners. Pixxel was among eight firms chosen for the $476-million contract, which runs through November 2028, for acquiring such data from commercial sources. Digantara, too, works with governments in Singapore, South Korea and the U.K.

Digantara, Pixxel and other Indian space start-ups are slowly getting noticed in the global market for the innovation they bring. India is currently home to over 200 start-ups in the space sector. "Not all of them are doing very well, but there are a few that have exceeded our expectations," says N. Sudheer Kumar, who was till recently Director of the Capacity Building and Public Outreach office at the Indian Space Research Organisation (ISRO).

Even though there hasn't been any mega deal in the space sector so far, there is a strong positive outlook, with some prominent start-ups going beyond Indian shores to do business. The Defence Space Agency (DSA), recently set up by the government, also allows start-ups to participate in developing strategic technologies — enabling them to get additional revenues beyond those offered by the civilian space market.

In the coming years, space tech start-ups are expected to benefit significantly from a boom in the Indian space sector. The industry may see a five-fold growth to $44 billion by 2033 from $8.4 billion in 2022, according to the decadal plan for the Indian space economy released last year by IN-SPACe, an autonomous agency set up in 2020 under the Department of Space to push space sector reforms (bit.ly/Space-India).

Start-ups in the space sector can broadly be categorised into four: those that focus on subsystems and components; those that choose to work in niche domains such as space applications; organisations dealing with core areas such as building and launching rockets and satellites; and start-ups working in multiple domains.

According to Inc42 Datalabs, which tracks Indian start-ups, nearly 100 companies had registered with ISRO in 2023 alone. It said new ventures in the space domain earned almost $233 million in funds between 2014 and May 2023 (bit.ly/startups-India).

Apart from Pixxel and Digantara, the prominent space tech start-ups in India are Skyroot Aerospace, Agnikul Cosmos, SatSure, Dhruva Space, Bellatrix Aerospace, and GalaxEye Space. They have raised more than $10 million each in funding. Skyroot topped the list with funds of around $100 million. While Skyroot and Agnikul specialise in building and launching rockets, GalaxEye seeks to launch a constellation of Earth observation satellites with sensors capable of penetrating clouds. Dhruva is an all-stack space engineering firm, and Bellatrix makes advanced propulsion systems for satellites and defence applications. SatSure gathers satellite data to meet the requirements of different business segments, including agriculture. There are many other start-ups in the space sector, smaller in size and funding, with varying degrees of success.

Among those doing "extremely well" are Digantara, Pixxel and SatSure, says Kumar. He adds that some start-ups – including Agnikul and Skyroot – got the "maximum support" from ISRO, which provided them space for a launch pad and launch support, and reviewed and qualified their hardware.

There are, however, start-ups that have not been able to get enough backing in the country because of the nature of their ideas – some novel and exciting concepts such as refuelling in space, docking and creating experimental habitats for microgravity experiments – because ISRO has not done much in these areas yet, Kumar says. For instance, Bengaluru-based Vellon Space plans to build reusable unmanned orbiting space stations for space experiments in collaboration with the Indian Institute of Technology Madras. And Bengaluru-based OrbitAID Aerospace is exploring the idea of tanker satellites, which will go to space and refuel client satellites.

Fledgling firms in this sunrise sector may get a boost from the government's plan to establish the new DSA. Inaugurating a defence expo in Gandhinagar, Gujarat, in 2022, Prime Minister Narendra Modi delineated 75 challenges that space tech start-ups could take up in five broad technology areas to help the freshly unveiled DSA. These include launch, satellite, communication, payload, ground, and software systems. These challenges are designed to help multiple companies compete to win projects funded through a programme called Innovations for Defence Excellence, or iDEX.

This is similar to the U.S. Space Force, a branch of the U.S. Armed Forces created in 2019 for military space activities. "DSA is in a very nascent stage today but the good thing is that now there is an agency whose mandate is to work on space-related activities," says Sharma of Digantara, which is also participating in some iDEX challenges. Many space tech start-ups have been able to participate in these challenges and get iDEX funding. Once these technology challenges succeed, the start-ups hope to get bulk orders, opening up another revenue generation opportunity, apart from the civilian and commercial space sectors.

Start-ups hope that when the defence space activities evolve and mature, revenues will increase. "But as of now, the DSA has no budget. We don't know yet what kind of budget will be available to the agency to support such activities," says Sharma.

Under the aegis of IN-SPACe, the government has approved a ₹1,000-crore venture capital fund for the space sector. The scheme, cleared by the Union Cabinet in October 2024, will be deployed over the next five years for capital infusion, talent retention and for attaining global competence, among other things (bit.ly/VCfund-space).

Sharma describes it as a "good start", but adds that the amount is not enough for the space sector because of the nature of projects. "(But) this is indeed a positive signal for other venture capitalists and investors looking to invest in the Indian space sector," he says.

Subba Rao Pavuluri, President of the SatCom Industry Association-India, which represents established satellite builders and operators as well as nascent firms, stresses that start-ups in the space sector have an important role to play in accelerating the growth of the Indian space economy. Many of these start-ups, he says, have innovative technology ideas and will be the key in creating skilled jobs in the country.

"With foreign direct investment allowed in the space sector, there is a need to ensure that they remain Indian companies, helping the country grow," says Pavuluri, who is also the Chairman and Managing Director of Ananth Technologies, one of the oldest Indian private sector firms specialising in building satellites and satellite subsystems.

See also:

They're building in space!
From ground to space
Start-ups are working to clear space debris
More stories on space start-ups
Indian start-ups dive into deep tech phase
Fuel for take-off
Start-ups born on campuses
Bridging the academia-industry gap
Support systems for start-ups
Outlook positive
Chipping in
The rise of quantum.in
Automated growth
India is poised for a tech leap