HomeBUSINESSGlobal investors keep away as startups struggle with space readiness

Global investors keep away as startups struggle with space readiness


NEW DELHI : When Indian space-tech startup Pixxel raised $25 million in March, it appeared to be modest fundraising by all standards except two. First, it was the largest amount raised by any Indian space company; second, it was the first time an overseas venture capital fund invested in the Indian space industry.

Pixxel is, however, an exception in the Indian private space sector, which has seen lukewarm interest from foreign funds.

Many Indian space-tech startups are in a somewhat uncomfortable position where they must work towards achieving space readiness (SR) before they can attract larger investments to scale up.

SR is a scale measuring from one to nine that is used by most space agencies and companies worldwide to understand how mature or proficient a company and its services are.

The National Aeronautics and Space Administration (NASA) defines SR level one as the conceptualization of a basic business or application idea, and level nine, the highest level, when a startup is “space-proven” and has achieved after a company proves its products through multiple demonstrations or flights to space. Because of this criterion, any new space mission always has multiple technology demonstrations (TD) missions first—be it for satellite deployments or rocket launches.

Pratip Mazumdar, co-founder and partner at Inflexor Ventures, an early-stage venture capital fund, said the highest that Indian startups have achieved in terms of space readiness is the penultimate stage.

While no international bodies or a central organization assigns a space readiness number to companies, based on the official descriptions of NASA and the European Space Agency, Pixxel would fall at level eight, or the penultimate level, of the readiness scale. Industry stakeholders state that startups such as Digantara and Dhruva would likely rank at level seven of the readiness scale since they have both launched prototypes or tested satellites in space.

Awais Ahmed, founder and chief executive of Pixxel, said that while the company has launched only one satellite so far, it has already begun offering the satellite-sourced data to its early commercial clients. It will become ‘space proven’ once its service is available to all commercial clients around the world, which Ahmed said may begin as soon as next month after it sends another satellite up in space with an ISRO mission.

“Once more startups start proving their technologies, the Indian market should be lucrative enough to attract global investments as well,” Mazumdar said.

“While Indian ventures have pitched the ‘low-cost’ value propositions in terms of the space operations that they are building, just focusing on the cost aspect will not be enough to draw eyeballs. As a result, global investors look at markets such as the USA or the European Union, which have more conducive policies and regulations, to invest in space ventures there,” said Anupam Shukla, a space sector lawyer and partner at Pioneer Legal.

Delays of launches are a regular affair in the space sector due to many factors such as prevailing weather conditions during a launch, technical glitches building up to a launch, and so on. Pixxel, for instance, launched its ‘Shakuntala’ satellite aboard a SpaceX Falcon 9 rocket on 1 April. While this launch was on-time, this was supposed to be the second Pixxel satellite to be deployed as part of its constellation. ‘Anand’, which was supposed to be Pixxel’s first satellite in space, is yet to be launched as the company awaits a launch timeline for ISRO’s next PSLV mission.

According to investment tracker Tracxn, India’s space sector has seen 54 funding rounds since the first publicly acclaimed Indian space startup, Team Indus, raised its angel round in November 2013. However, in the nine years since, only $155 million has been raised by the sector.

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