From groundbreaking missions to Mars, the Moon and close to the Sun, India’s space endeavors have captured the world’s attention, and even inspired a brand new generation of space enthusiasts.
Now, the aim for India’s fledgeling space startups is to become a part of the global space ecosystem and leverage the incredible engineering diaspora India has created over the decades. This was the overwhelming consensus among a group of experts from the industry discussing the spurt in ancillary space tech startups on the second day of the Mint India Investment Summit 2024.
In a panel discussion titled ‘India and the final frontier’, the participants Arjun Rao, partner, Speciale Invest; Suyash Singh, co-founder & CEO, GalaxEye; and Chaitanya Giri, associate professor, Space Studies, FLAME University, also discussed the challenges facing the space tech sector, and how India startups can tackle them to become a part of the cosmic adventure unfolding currently.
For instance, Suyash Singh, co-founder and CEO of IIT Madras-incubated space tech startup GalaxEye, highlighted the lack of access to capital at the growth level in the industry.
“Unlike the deep tech ecosystem at large, space tech has its own gestation period. The first prototype will only come when you have an asset in space. That makes attracting funding difficult in the beginning,” said Singh, citing the example of GalaxEye, which was started in 2020, and which is engaged in building the next generation of earth observatory satellites.
Highlighting the country’s legacy in space research, Chaitanya Giri of Flame University, said India has entered a new era of space research called Space 2.0. “Previously, it was big companies assisting ISRO with its designs. However, in this new era, innovation is emerging from the private sector.”
Reiterating the optimism about the space tech sector, Arjun Rao of tech-focussed venture capital firm Speciale Invest, cited five investments made by his company in space tech startups, while emphasizing that the market would grow significantly in the coming decade. “We chose to invest in space tech because of India’s evident heritage in ISRO. India has been involved in space technology for many decades, giving us confidence in our capabilities,” said Rao.
Being a capital intensive sector, Rao added that the foreign direct investment (FDI) flowing into the sector will also encourage local capital. According to him, local investors will have an early mover advantage as “we may see customer base increasing after initial successful launches.”
Highlighting the growing opportunities in the country’s space sector, Giri of FLAME University, said that space tech founders should see themselves as OEM manufacturers. “You have to see the space program in three different venn diagrams. One is civilian, the second is military, and the third is the defence space sector. They will interface with each other and create newer contracts,” he explained.
“We’ve entered the era of Space 2.0. The new mantra is innovation, which will come from the private sector,” Giri added, while noting that new contracts will continue to come from ISRO and B2B commercial space firms. “The future is bright, but we need to focus on channelizing capital in the space sector,” he added as a word of caution.
Focussing on the challenges facing the space tech sector, Singh of GalaxyEye, said that the availability of quality talent, test facilities, and funding were the primary challenges. However, he added that the doors of ISRO are open for the industry players, and they can go, talk to them, seek advice and leverage their facilities to grow. “This gives confidence to investors, too, to back space tech in India,” Singh said.
Meanwhile, Giri said that the space tech sector needs more domestic institutional investors in the next 2-3 years. “So that in five years, once we have the first crop of space companies, the investors will be more confident,” Giri said. “We need more domestic capital pumping into the space sector so that it can flourish despite geopolitical constraints.”
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