The Indian Space Tech startup ecosystem witnessed record funding of $126 million, a 7 per cent increase from the $118 million raised in 2022 and a 235 per cent increase from $37.6 million in 2021. India is home to more than 100 space tech startups, the majority of them being founded in the last past 5 years.
Bengaluru leads the list of top-funded cities in India's space tech sector, followed by Hyderabad and Chennai. The top investors in this sector are Speciale Invest, Anicut Capital, and GrowX Ventures, highlighted the recent Space Tech Geo Report 2024 by Tracxn (a data intelligence platform for private market research). The report gives an overview of the Space Tech sector in India, focusing on recent trends, funding dynamics, and key developments.
As per the report, Skyroot Aerospace was the highest-funded, with overall funding of $99.8 million, followed by Pixxel at $71.7 million and Agnikul at $61.5 million. The recent Union Budget has allocated Rs 1,000 crore to support space technology startups, aimed at boosting the sector’s development and attracting further investment. This initiative, along with the establishment of the Indian National Space Promotion and Authorization Centre (IN-SPACe) in 2022, is expected to drive substantial innovation and growth.
The report finds that in 2024, the year-to-date funding stands at $10.8 million. Despite a global slowdown in funding, the Indian space tech sector has been experiencing an upward trend, driven by substantial government support and significant innovations. The report highlights that India has emerged as a formidable player in the global space technology arena. Currently, India boasts 55 active space assets, including communication, meteorological, and earth observation satellites.
Interestingly, the Indian space tech sector's funding landscape is predominantly driven by early-stage investments. In 2023, early-stage rounds attracted $120 million of the total $126 million raised, reflecting a notable growth from $114 million in 2022, which represents a 5 per cent increase.
In 2024, early-stage funding has reached $8.5 million to date. Seed-stage funding has also seen a significant rise, growing from $4.3 million in 2022 to $5.3 million in 2023, marking a 24 per cent increase. However, despite this growth in early-stage and seed-stage funding, the nascent ecosystem for private sector participation in Indian space tech startups has not yet experienced any late-stage funding.
The top funded business models in this space include Small Satellite Launch Vehicles, Satellite Imaging Services, and Satellite Communication Services. Notably, the Small Satellite Launch Vehicle segment has attracted $168 million to date, with Skyroot raising the highest funding in this category.
Despite the vibrant funding landscape, no acquisitions have been observed in 2024 YTD. The only acquisition to date is the 2022 purchase of Prakshep, a satellite imagery provider for the agricultural industry, by Arya. Additionally, the sector is yet to witness the emergence of unicorns. MTAR and Ananth Technologies are the only public companies in this space.
“India’s space tech sector is growing rapidly, thanks to strong government support and a dynamic startup scene. The significant funding and strategic investments we're seeing now are setting the stage for India to become a major player in the global space industry,” said Neha Singh, Co-Founder of Tracxn.
“Looking ahead, we expect the sector to attract even more investment, sparking more innovation. The combination of solid early-stage funding and supportive government policies will be key to driving this growth and establishing India as a leading centre for space exploration and technology,” she added.
The privatisation of the space sector has catalysed a multi-fold increase in activity. The International Astronautical Federation awarded India the prestigious World Space Award for its successful launch of Chandrayaan 3, which made history in 2023 as the first mission to achieve a soft landing on the moon's south pole. This landmark achievement has set a global standard for India’s potential and cost-effective engineering in the space tech industry.
An interesting highlight of the report is that space tech startups based in Bengaluru have contributed to more than 55 per cent of the total funding in this space, and it is also the city with the highest number of space tech startups. The evolution of the space industry highlights a global shift from government control to private-sector collaboration.
The report observes that the United States, a pioneer in privatising its space industry with the 1984 Commercial Space Launch Act, has significantly benefited from private company contributions through NASA's Artemis program. Federal funding for NASA has consistently increased, with $24.8 billion allocated in the 2024 budget.
In terms of geographic funding, the US remains a leader in space tech startup funding, although it has seen a decline from $5.5 billion in 2021 to $660 million in 2024. Europe, on the other hand, has seen increased funding in its space tech sector, with $407 million raised in 2024 to date, following a record $512 million in 2023.
The UK, while experiencing fluctuations in funding, shows signs of recovery with $135 million raised in 2024 to date. Similarly, the UK has invested €50 million in its Positioning, Navigation, and Timing (PNT) sector since 2017, employing a hybrid model that leverages private technologies for space missions.
The report further points out that in recent years, the European Space Agency (ESA) has shifted to a competition-based model, inviting more private players to develop and launch space missions. This strategic shift, driven by a series of delays and failures in rocket launches, aims to attract private investment and boost entrepreneurship in the region.
Despite the existence of the ESA, countries like Germany, Italy, and France maintain their space research agencies, working in collaboration with the ESA. The ESA's budget for 2024 is $8.3 billion, a 10 per cent increase from the previous year, with significant contributions from Germany, France, and Italy. A major portion of this budget is allocated to Earth Observation operations (30 per cent), followed by space transportation and navigation.
India's space tech sector is also growing rapidly, fueled by government support and a dynamic 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 investment and sparking further innovation.
