Hyderabad: India’s spacetech startup ecosystem took almost 15 years to get within striking distance of $1 billion in cumulative funding. Founders and investors now believe the next billion could arrive much faster — possibly within three to five years — as govt capital, specialist venture funds and private investors become more willing to back high-risk, deep-tech ventures.What began as a small cluster of companies has grown into a crowded and increasingly confident sector. Early movers such as Dhruva Space, founded in 2012, and Bellatrix Aerospace (2015), were among the first to test the market. By 2018, when Skyroot Aerospace was founded, India had around 10-15 spacetech startups, said Lt Gen AK Bhatt (retd.), founding director general of the Indian Space Association. Today, that number has crossed 400.For years, raising money was difficult. Space companies were seen as hardware-heavy, capital-intensive, risky and slow to commercialise. That perception has shifted sharply, especially after Skyroot Aerospace’s maiden Vikram-1 mission, Mission Aagaman, helped demonstrate that private Indian space companies could execute complex missions and attract serious capital.Indian spacetech startups raised more than $871 million till July 2026, according to market intelligence platform Tracxn’s first report on the sector.The industry also saw its first unicorn this year after Skyroot Aerospace crossed a valuation of $1.1 billion following a $60 million fundraise in May. With total funding of $160 million, Skyroot remains India’s most funded spacetech startup.Pawan Kumar Chandana, co-founder and CEO of Skyroot Aerospace, said several companies are now entering the growth phase, where capital requirements are much larger. “Even if five or six companies raise growth capital in the next three-four years, it will be another $1 billion-plus,” he said.Sanjay Nekkanti, founder and CEO of Dhruva Space, said access to capital has changed significantly over the past decade as investors have started moving money into hard tech and deep tech. He said the sector could reach its first $1 billion funding milestone as early as this financial year, with fundraising likely to accelerate as companies scale, generate revenue and consolidate.Industry executives said policy changes and govt support have played a major role in improving investor confidence. Bhatt said startup formation increased after govt began supporting the industry through policy measures and funding initiatives such as Research, Development and Innovation Fund (RDIF), dedicated Rs 1,000 crore space sector venture fund and Technology Development Fund (TDF).“It has really helped,” Bhatt said.Venture capital remains the largest source of funding for spacetech startups, Bhatt said, while govt-backed funding has added momentum.Traditional lending, however, remains a challenge. Banks and large lenders still assess companies using conventional asset and annuity models, which do not always apply to spacetech startups. Their assets may be in orbit, embedded in ground infrastructure or tied to intellectual property rather than available as standard collateral, he said.But Kavikrut, CEO of T-Hub, said Skyroot’s Vikram-1’s recent success has strengthened confidence in private space companies and encouraged more high-risk early-stage capital to enter the sector.Hyderabad-based Abyro Capital recently launched Beacon, a programme offering $500,000 first cheques to spacetech founders. Abyro Capital adviser Srinivas Rao Mahankali said most investors had earlier focused on companies with higher technology-readiness levels, leaving very early-stage founders underserved. Beacon is designed to address that gap.Some founders said while smaller rounds have become easier, larger cheques remain harder to secure. Ronak Kumar Samantray, founder of TakeMe2Space, said opportunities for sub-$10 million rounds have increased, but raises above $10-20 million are still uncommon.“Every alternative we get a LinkedIn message from some random investors because today everybody’s interested in deep tech. Yes, investor conversations are smoother than before, but large rounds still depend on revenue, reliability and repeatability,” said Samantray, whose startup developed a 50Wh commercial satellite battery pack and space-qualified it on board Vikram-1 and is also working on launching an AI data centre in space.Pranit Mehta, co-founder of GalaxEye, said investor appetite is clearly rising. Dr G Satheesh Reddy said apart from govt-backed mechanisms, capital is now also flowing in from the UAE, Singapore and family offices with growing market confidence driving the shift.
