Will government backing and investor interest help India's spacetech sector lift off?
Finance Minister Nirmala Sitharaman in May announced the inclusion of private players in the space sector to tap the potential of space technology. This was followed by the formation of an autonomous nodal agency, Indian National Space Promotion and Authorisation Centre (IN-SPACe), an extension of ISRO, to include private players in space-related activities.
Since then, backed by favourable government policy, local expertise, and investor scrutiny, India’s spacetech sector has taken centre stage. With Aatmanirbhar Bharat the ultimate aim, it is important for startups and innovators to come up with innovative solutions that reduce dependency on imports.
Speaking at the International Space Conference on Ushering the New Era for Indian Space Sector, Nilesh M Desai, Associate Director, Space Applications Centre (SAC), said opening up the space sector would bring “a new era for tech entrepreneurs and offer exciting opportunities to private players”.
The online conference was held from September 15-17.
According to a PwC report, the Indian space economy is valued at $7 billion and comprises two percent of the global space economy. The Indian space sector needs to grow at an approximate rate of 48 percent CAGR over the next five years to reach its target of $50 billion.
According to media reports, there are about 300 active private players in India’s spacetech segment and majority of them have been working as suppliers to ISRO.
Spacetech stakeholders and experts are unanimous that inclusion of the private sector in space opportunities will help India expand the market size and reduce dependency on imports.
In an earlier webinar, Dr K Sivan, ISRO Chairman and Secretary in the Department of Space (DoS), had revealed that the embargo on import of communication satellites, including GSAT 7R, GSAT-6 Satellite Terminals and Communication Satellite GSAT-7C, under Aatmanirbhar Bharat Abhiyan was a huge opportunity for ISRO and private players to build their own satellites.
According to Nilesh M Desai, Associate Director at Space Applications Centre (SAC), the opening up the space sector would bring a new era for tech entrepreneurs.
Opportunities for private players
Addressing the audience virtually, Nilesh explained that private players had opportunities to build satellites for communication and remote sensing among other purposes.
“Tech entrepreneurs and private sectors have business opportunities in developing space applications for remote sensing, communication, GPS Aided GEO Augmented Navigation (GAGAN), and Navigation with Indian Constellation (NavIC),” he said.
Earlier, R Umamaheswaran, Scientific Secretary, ISRO, had said private players were interested in manufacturing launch vehicles and satellites, and providing space-based services.
Till now, space-related activities were carried out entirely by ISRO; the private sector’s involvement was limited to collaborating with the space agency for component manufacturing.
However, with the new reforms, ISRO will provide startups and MSMEs several opportunities to develop products and also conduct their own space missions.
Spacetech experts agree that opening up the spacetech sector will ensure faster digital inclusivity in India.
Spacetech startups welcome reforms
Rohan M Ganapathy, CEO and CTO of spacetech startup Bellatrix Aerospace, said, ‘In 2015, when we started, we needed to educate investors and the government on how tech startups could contribute to the spacetech industry. It was only in late 2018 that startups started being included in the spacetech sector; the ecosystem now knows how startups can contribute to the market.”
Bengaluru-based Bellatrix Aerospace is the only startup involved in developing propulsion systems for ISRO.
Talking about opportunities, Awais Ahmed, Founder and CEO of microsatellites maker Pixxel, said spacetech startups would need to identify gaps in the spacetech ecosystem and build solutions to bridge them.
“India has a huge talent base in the space ecosystem. Startups need to identify gaps across the world and build on these,” Awais said.
Pawan K Chandana, Co-Founder and CEO, Skyroot Aerospace, agreed, stating that the spacetech startup ecosystem was now hoping for “startup-friendly policies to sustain the segment”.
In need of funding support
Kris Gopalakrishnan, Chairman and former CII president, Chairman of Axilor Ventures, and Co-founder of Infosys, highlighted the importance of funding, stating that investors needed to back startups in the spacetech sector with funds to sustain and grow.
He clarified that the funding needed to come from the private sector as the government had to focus on policies and reforms to ensure a comfortable business environment for startups.
This year has seen three funding deals for spacetech startups. Pixxel raised $5 million seed funding from Blume, growX and Lightspeed; Chennai-based Agnikul raised Rs 23.4 crore led by pi Ventures; and Pune-based Vesta Space Technology raised $10 million from Next Capital.
Vishesh Rajaram, Managing Partner at Bengaluru-based VC firm Speciale Incept Advisors, said investing in spacetech startups needed patience as one could not expect startups to complete innovations in a short amount of time. He added that venture capitalists would want to see whether startups were able to complete certain parts of the project or mitigate certain risks in a year or two.
The VC firm has placed their bets on two spacetech startups: Agnikul and AstroGate Labs.
“It's a great time for startups to work towards risk reduction and technological innovation with the opening up of the space sector. We understand that we need to be patient because space innovations cannot be completed in a month.”
Santhosh C Kurup, CEO at ICT Academy of Kerala, spoke about Kerala’s SpacePark initiative, where the local government is developing a comprehensive spacetech ecosystem to help startups, researchers, innovators, and small businesses develop solutions and thrive in the sector.
He said that the initiative would focus on five major areas:
- Physical infrastructure for development of solution
- Common facilities such as test centres
- Open data availability with a platform for aggregating spacetech data (such as GIS and imagery) for startups and MSMEs
- Experts or mentorship pool
- Global partnership and extended experts pool for investments and partnerships
With the new reforms in place, the central government and ISRO believe that the public-private partnership will help grow India’s spacetech ecosystem and improve its global ranking. As private players become co-travellers with ISRO in India’s journey to space, the country is on course to achieve its aim of making spacetech a $50 billion industry.