Indian Space-Tech Sector: Evolving & Attracting Investors

For times immemorial, the human mind has remained enthralled by the desire to explore and rule the expanse of space that once stood totally invincible to human intrusions. But not anymore. Over the years, slow, yet steady space breakthroughs have helped us mankind use them for our wellbeing. We use a lot of space exploration technology benefits in our day to day lives. Today, our lives are well connected; highly informed, well protected, and meaningfully healthier, and we owe our thanks to the knowledge that we have assimilated through painstaking research and exploration of space thus far.

The Rise of Space-tech 

According to the research by Statista, the global space economy was valued at approximately $ 446.9 billion in 2020 which included a range of activities such as researching, exploring and utilization of space. The commercial space products and services segment of the global space market accounted for almost 50 per cent of the total turnover of the industry. (i.e., USD 219.4 B). According to IBEF data, the space industry in India stood at $ 10.4 billion in 2020, constituting a minuscule share of 2-3 per cent of the global space market, reflecting a tip of iceberg kind of position for India’s performance in comparison to the global market performance as of now.

Today, India is witnessing rapid growth in the space tech sector. According to a global report published in June 2021, India is now home to 368 private Spacetech firms, compared to 35 firms in Feb 2020. In terms of numbers, India stands 5th in position after the US, the UK, Canada and Germany, well-surpassing numbers of countries, such as China (288), France (269) and Spain (206). According to the Former Chairman of ISRO, Mr. K Sivan, the private company proposals in the space sector have witnessed a 30% rise in activities, in areas such as development of launch vehicles, building & operating satellites, and establishing ground segments & research partnerships.

The Opportunity

Globally, the private Space-tech players are seen developing space technologies for manned landings on the moon and for building airplane-borne rocket launchers for advantages, such as lower cost and greater responsiveness, compared to the ground-based systems. The private players in the Indian space sector seem to have caught up with maintaining the global trend by aligning themselves with technology developments on similar lines.

The primary enabler for this accelerating growth in the Space-tech industry can be attributed to the government policy, dated June 26, 2020, which approved private participation across all areas of the space value chain. Prior to this policy reform, the space domain in India was restricted to the national space agency, Indian Space Research Organization (ISRO). The contribution by private Space-tech players was limited to the mere supplier function as ISRO worked with a network of over 500 suppliers of various components for the industry.

Additional reforms, such as the launch of ISpA to build global linkages to usher in critical technology and investments into Indian space industry, revision of FDI policy for fostering better investments; The Public Sector to focus primarily on R&D activities alone while facilitating technology transfer to the private sector for commercialization, and lastly the initiative to share ISRO’s capital intensive facilities with private players, among others, have been brought forth with a sole objective of boosting India’s contribution in the global space economy to 10% and these reforms have been received with great enthusiasm by the industry stakeholders.

Capturing Investor’s Attention

On the heels of these reforms, the Space-tech industry witnessed a spectacular investment frenzy ever received by the sector in the recent past. In 2021, Anand Mahindra backed Agnikul Cosmos and Hyderabad based Skyroot Aerospace received $ 11 million each in Series A funding; Hyderabad based Dhruva raised Rs 22 Crore from Mumbai Angels Network and other investors in October, and Bangalore based space tech firms, such as Digantara raised $ 2.5 million from Kalaari Capital, Pixxel raised $ 7.3 million from Techstars and Omnivore VC, and SatSure raised an undisclosed amount.

With privatization of the Indian space sector being pursued actively, the opportunities hidden in space data are being quickly spotted by the private players for creating solutions either as individual players or as a consortium effort. The year 2021 saw few startups, at IIT Madras, coming together to build technologies, such as rapid launch capabilities, satellite design and assembly, sensors, future generation communication (6G), security of satellites, ground stations, data processing etc, through a consortium called I-STAC.DB (Indian Space Technologies and Application Design Bureau).

Summing Up

The success of Space-tech technologies is bound to have its cascade effect on sectors, such as communications, transportation, agriculture and disaster management.  Technologies such as satellite broadband (globally estimated to generate 50% of the global space market growth by 2040) and mapping ecosystems that thrive on receiving consistent real-time information transmitted from the satellite are just a few, among many, that are set to revolutionize human lives further. With the pace of investment activities ramping up in the sector, the Indian space tech sentiment is upbeat about its future as it expects to clock a 48% CAGR to the tune of 50 Bn USD by 2024.

(The given article is attributed to Nandini Mansinghka, CEO & Co-Founder of Mumbai Angels and has been exclusively created for BW Disrupt website)