Houston, We Have a Problem

Indian space-tech start-ups are running out of fuel just as they reach critical altitude

- Mahima Sinha

From the ramparts of the Red Fort this August 15, Prime Minister Narendra Modi proclaimed, "Our space sector was in shackles...we have liberated it from past restrictions." The remark drew widespread agreement. The Modi administration has done much to give wings to India's space ambitions. The Indian Space Research Organisation (Isro) has notched multiple successes, and space-tech start-ups have mushroomed across the country.

The 2025 fiscal Union Budget has announced a Rs 1,000-crore venture capital fund for space-tech start-ups. Yet beneath the gleam of these successes, a humbling reality looms: the near absence of patient capital.

Indian space-tech start-ups have seen a surge of capital the past three years. Funding soared from $37.6mn in the 2021 fiscal to more than triple that in 2022, and to a 235% leap to $126mn in 2023, according to data from capital markets firm Tracxn. But a closer look reveals a troubling trend: of the $126mn, nearly 95% went to early-stage start-ups while a paltry sum trickled to late-stage companies. Early-stage investments dominate the funding landscape, with seed-stage start-ups receiving only a modest boost from $4.3mn in 2022 to $5.3mn in 2023. But late-stage start-ups-those most poised to deliver tangible results-are struggling for funds.

Failed Take-offs

India's space-tech ecosystem is fertile ground for new ventures, yet not all are thriving. Dhruva Space, founded in 2012, is one of the country's oldest space-tech start-ups, but it closed its Series A funding round 12 years later in April this year. Of the 200-odd space-tech start-ups in India today, only two-Ananth Technologies and MTAR Technologies have been listed on the stock exchange, and the sector has yet to produce a single unicorn.