India’s Spacetech Funding Skyrockets In 2023, Yet It Trails Behind Global Titans

Ahead of the Union Budget 2024-25, where the government announced a Rs 1,000 crore venture capital fund for investments in innovation and R&D in space-tech, data suggests a record increase in the funding in the sector. 

Tracxn’s data on India’s space tech sector shows that in 2023, space-tech funding surged to $126 million, marking a 7 per cent rise from the $118 million secured in 2022 and an astounding 235 per cent leap from $37.6 million in 2021. However, year-to-date funding for 2024 currently totals $10.8 million. Skyroot Aerospace topped the funding charts with $99.8 million, with Pixxel trailing at $71.7 million and Agnikul securing $61.5 million. 

In 2023, early-stage investments dominated the Indian Space Tech sector, drawing $120 million of the $126 million raised, up from $114 million in 2022—a 5 per cent increase. Year-to-date in 2024, early-stage funding totals $8.5 million. Seed-stage funding also rose from $4.3 million in 2022 to $5.3 million in 2023, a 24 per cent increase. Despite these gains, late-stage funding remains absent in India’s space tech startup ecosystem.  

In 2024, no acquisitions have occurred yet, with Arya's 2022 acquisition of Prakshep being the only one. The sector has not seen any unicorns yet, and MTAR and Ananth Technologies remain the only public companies. 

The rise in India’s funding comes at a time when the US has seen a decline from $5.5 billion in 2021 to $660 million in 2024. However, India is still running behind the major titans, US and Europe. The US is the leader in space-tech industry and has been a pioneer in privatizing its space industry with the 1984 Commercial Space Launch Act. In contrast, Europe's space tech sector has thrived, raising $407 million in 2024 so far, following a record $512 million in 2023. The UK, despite some funding fluctuations, is rebounding with $135 million raised to date in 2024. 

However, the report states that India’s journey is promising as it has over 100 space-tech start-ups and most of them have been founded in the last 5 years only and the fund of Rs 1,000 crore is further expected to boost it.  

Srinath Ravichandran, co-founder and CEO of Agnikul Cosmos, which recently made history by launching ‘Agnibaan’ the world’s first 3D-printed rocket engine had earlier shared with Outlook Business that space tech sector has become more accepted in India now when it comes to the VCs and investors and that the government is really serious in implementing the various policy measures in this sector.  

“When a company like Skyroot launches, it's very clear that it’s a victory for paperwork. It shows that you can launch from India privately. Similarly, Dhruva and Pixxel have launched with ISRO, and we are also preparing to launch. It clearly shows that the government is very serious about implementing it”, he had said.  

Space-tech industry stakeholder are also hopeful of the industry as the Rs 1,000 crore fund along with the establishment of the Indian National Space Promotion and Authorization Centre (IN-SPACe) in 2022, is expected to boost the growth of the industry in the long run.