A fund of ₹10 billion to ignite space tech startups! Eyeing more employment in this sector, the Union Cabinet aims for global competitiveness in the burgeoning space economy.
The Union Cabinet has greenlit a ₹10 billion venture capital fund to support space tech-focused startups in India through the IN-SPACe programme, as Union Minister Ashwini Vaishnaw announced on Thursday.
This fund will be operational for a maximum of five years, with annual investments projected between ₹1.5 billion and ₹2.5 billion based on available opportunities. Furthermore, investment amounts will range from ₹100 million to ₹600 million, tailored to the stage of the company and its potential impact on national space capabilities.
Specifically, the fund intends to support approximately 40 startups, with equity investments structured as ₹100 million to ₹300 million for growth-stage companies and ₹300 million to ₹600 million for those in late growth stages.
According to the Department of Space (DoS), the initiative is set to enhance India’s space sector by aligning with national priorities and the goals of ‘Atmanirbhar Bharat.’ Its key objectives are to infuse capital, retain companies in India, expand the space economy, accelerate technology development, boost global competitiveness, foster innovation and ensure long-term sustainability within the sector.
It is also expected to enhance employment in the sector by supporting startups throughout the space supply chain, potentially generating hundreds of direct jobs in R&D, engineering, software and hardware development, manufacturing and thousands of indirect jobs in related industries.
Eyeing a robust startup ecosystem, the fund seeks to develop a skilled workforce and stimulate innovation, improving India’s competitive stance in the global space market.
Established as part of the 2020 space sector reforms, IN-SPACe encourages and regulates private sector participation in space activities. The ₹10 billion fund responds to the pressing need for risk capital, especially as traditional lenders often hesitate to invest in this high-tech sector.
With nearly 250 space startups emerging, timely financial support is crucial for their growth and to retain talent within India. As the DoS stated in a press release, “The proposed government-backed fund will boost investor confidence, attract private capital, and signal the government’s commitment to advancing space reforms.”
Moreover, the fund will also function as an Alternative Investment Fund under SEBI regulations, providing early-stage equity to startups and facilitating their growth for future private equity investments.
