The Ride To The Moon

In 2017 the Indian Space Research Organisaiton (ISRO) floated a tender calling for private sector participation in building a satellite for the first time. “It was not a large number, there were all of 59 companies in the room. We counted,” recalls Exseed Fund Founder and Managing Partner Mahesh Murthy. At the end of the meeting with private sector bidders, ISRO chose three partners, Exseed among them. The other two companies that bagged the ISRO tender were the public sector Bharat Electronics and Tata Advanced Systems, a large outsourcing company.

“But things have changed in the two years since,” says Murthy. And that — despite the fact that investment in space exploration and expedition is really like betting on the abyss of space. If the venture works, the investor gets to become a part of history and begins a tryst with next generation technology. If it does not, some hard-earned money flows into a black hole.

 India’s prowess in space technology is exceptional, as ISRO demonstrated with its Chandrayaan-2 mission. The Geosynchronous Satellite Launch Vehicle (GSLV-MkIII-M1), dubbed Baahubali, lifted-off from the second launch pad at the spaceport and successfully placed the 3,850-kg Chandrayaan-2 into the earth’s orbit. Since the launch of the Soviet Union’s Sputnik 1, the first artificial satellite, into an elliptical low earth orbit in 1957, more than 8,650 objects have been launched into space.

In the years ahead, one cannot rule out India Inc. taking the lead in space expedition. In the United States, new age e-commerce giant Amazon’s founder Jeff Bezos is looking at space exploration through his latest venture, Blue Origin. Bezos has talked of lower costs of space research and exploitation of resources in outer space, like generating fuel using ice in the dark craters of the moon. South African billionaire Elon Musk hopes to revolutionise the aerospace industry with his company, SpaceX, which proposes to begin commercial flights to the moon and beyond.  



SpaceX is expected to launch a Falcon Heavy rocket carrying 24 satellites for the US military. It also aims to carry the immortal ashes of a hundred people into outer space, including those of actor James Doohan, who played Scotty on Star Trek. SpaceX, now valued at $33 billion, plans to launch a constellation of more than 12,000 small satellites into the earth’s orbit in a programme named Starlink. It is the beginning of an era of a new breed of entrepreneurs and private individuals who look to exploit space for both advancement of humankind and greed, which is cause célèbre for futuristic enterprises that are yet to establish a clear business model.

So what would be the business model for space research and expedition in the future? “By 2040, there will be 1,000 people living and working on the moon with 10,000 annual visitors,” according to Aaron Sorenson, a spokesman of the Japanese lunar exploraton startup iSpace Inc. Both technology giants and startups pursuing bold plans such as selling space tourism and mining asteroids in the sky are winning millions in investment. Significant drops in launch costs by technological breakthrough such as development of commercial reusable rockets have caught the interest of startups and investors.

Space hotels, cosmic business insurance, celestial advertising billboards, and in-space manufacturing are among the businesses being explored by firms that hope that technology will open up new horizons amidst a boom in commercial space activity. The United States and Luxembourg have both passed legislation aiming to allow property rights on planets and create regulations to permit space mining, with Russia indicating earlier this year that it may follow suit.

At this stage, even as humans search for a perfect horizon in space, the global space industry is estimated to be $350 billion and is likely to triple in size by 2040, according to the US investment bank Morgan Stanley. Any key breakthrough in the near future will only make these business propositions more viable. The scramble for a berth in outer space has now begun in right earnest.


Startup founders with ISRO Chairman Kailasavadivoo Sivan: Pivate players need guidelines for participation in India’s space exploration programme and look to the Space Activities Bill for clarity on policies


The business of space 
How monolithic is the space business? “On one of the online groups where many of us new space entrepreneurs hang out, one of the older gents who worked for a US multinational said that there’s no way any private startup from India had the smarts to launch a satellite,” recalls Mahesh Murthy.

Exseed Fund of which Murthy is managing partner is the only fund in India focused on space. “I had challenged him then that we would launch two (satellites) within a year. He pooh-poohed us. Now, two launches later, he is strangely silent on the group,” quips Murthy.

Till now, space expeditions have been about sending satellites into space to map and conduct activities on earth, like better communication and navigation. From now on, it may be about launching heavy satellites into the earth’s outer orbit (beyond the low orbit) and space tourism in the sub-orbital level above the earth, where one feels zero-gravity and is able to look down at the curved image of the earth. Yasuka Maezawa, owner of a Japanese fashion conglomerate, has already made a payment for a trip around the moon, planned as early as 2023.

Till 2009, most of the research and expeditions into outer space were undertaken by government agencies, but that has changed in the course of a decade. A report titled Start-Up Space, published by Bryce Space and Technology in 2018, showed that investments into space companies, from venture capital to debt financing, totaled $3.23 billion. It said venture capital investment alone grew 22 per cent in 2018 to $2 billion.



According to a statement placed in Parliament, altogether 239 satellites were launched by ISRO’s commercial arm Antrix Corporation in the last three years, enabling it to earn a revenue of Rs 6,289 crore. At the moment, India’s share in the global space industry is just about seven per cent, even though India is an advanced player in the research and development (R&D) of various satellites. The Indian Space Research Organisation not only competes with the best in world, but has an edge in some futuristic technologies too, as was evident from the launch of Chandrayaan-2. The satellite is about to place a lander called Vikram on the lunar surface. Only three countries, the United States, Russia and China, have attempted and succeeded in such soft landing on the moon.

Space ecosystem in India
The Indian space ecosystem is in a nascent stage, but some new startups have emerged in this domain. Even as ISRO aims at new aspirational projects, new space startups are emerging every day with innovative ideas to plug technological gaps in the industry, says Ankit Bhateja, Founder of Xovian Research and Technologies. The scale of business in the domain of space exploration is changing so fast that as many as 500 companies have emerged with ISRO opening its doors to private sector participation in the business.

Xovian is a New Delhi-based aerospace startup that offers sustainable solutions in satellite fabrication. It also conducts educational and research-based activities to bridge the innovation gap between industries and educational institutions. “With startups coming out with new revolutionary ideas India is destined to be one of the leading nations in the space exploration race,” says Bhateja.

In the realm of space research and exploration, India’s private sector is layered in three levels, the giants, mid-level companies and startups. The giants are defence public sector undertakings (DPSUs) like Hindustan Aeronautics, Mishra Dhatu Nigam and Bharat Electronics (BEL), along with large private sector entities like Larsen and Toubro, Godrej, Tata, HCL, Wipro and Tech Mahindra. Larsen & Toubro is among two of ISRO’s oldest industry partners, apart from being among its five major industry partners.



Mid-sized companies in the aerospace domain are mostly ISRO’s tier-2 and tier-3 vendors. The almost 500 private sector players in this domain have revenues hovering between Rs 20 crore and Rs 200 crore. Companies like Alpha Design, Ananth, Data Patterns and Apollo have already done a great deal of space-related work and show tremendous potential.  In the third layer are startups like Xovian, GroundCloud and HF Signals. “A couple of years ago, there were maybe five or ten of us,” says Bhateja, “Today, there are 35 to 50 startups from India who are trying to do something worthwhile in the space economy.”

Giants and dwarfs 
The demonstrable capability of India Inc. is growing the risk appetite for a domain in which one jumps into the unknown with the conviction of scientific innovation, for the satisfaction of a sigh of relief and sometimes, great profitability. That is the nature of the space business. Jayant Patil, Senior Vice President, Defence & Aerospace at Larsen & Toubro says his company has invested in infrastructure and manufacturing facilities that cater specifically to the requirements of ISRO. “We have allocated more than 250 acres of land, with 20,000 sq. metres of covered area across our factory locations and plan for an additional 20,000 sq. metres,” says Patil (read interview: ‘Current Policy Does Not Allow Exports’).

Larsen & Toubro is among ISRO’s tier-1 suppliers. “L&T has state-of-the-art facility for manufacturing booster segments, clean rooms for ultra-precision solar array deployment devices at Powai, high-end composites manufacturing facilities at Vadodara and Coimbatore as well as precision manufacturing facilities at Coimbatore to cater for the exacting requirements of ISRO,” says Patil.

Boot-strapping to space 
In the startup scenario, companies are often more tight-fisted. As Dhruva Space Founder & CEO Sanjay Nekkanti explains, “We are a boot-strapped company so far. Thybolt, our sensor division, generates revenues which feeds into the space research activities of the company.” Mahesh Murthy explains that for startups, “the financing is at two levels”. Exseed is setting up India’s first fund for space and expects to announce the first close soon, with participation from multiple parties. “This should help us play in every segment of space. We will announce the size and other details later, but suffice to say that it will be in the range of hundreds of crores of rupees,” says Murthy.

Exseed’s journey has not been smooth all along though. “We have had to pay from our own pockets to prove our credentials in every case. We paid to build and launch our satellites. We paid to put up our ground stations. And we paid to develop our first communication payloads,” says Murthy. In the end though, the risk-taking paid off. As an exultant Murthy points out, “this risk taking has resulted in commercial orders coming our way. One of our group companies is already profitable. The others should be soon!”

Kris Nair, Founder and CEO, Kawa Space says, “We have raised a pre-series A round from Vijayshekhar Sharma (Founder, Paytm) and Speciale Invest Fund, space-focused venture capital firm.” Kawa Space’s team built and launched India’s first privately built satellite. “While the journey has been long and hard,” says Nair, “we are extremely grateful to all the help and support that we received during the course of the mission from the likes of ISRO and the Indian government.”  

As an industry, space exploration is unique, where even a first breakthrough can be a “eureka” moment for an industry player. “The good thing about this business is that even getting one order in a year can make a startup break even, or wildly profitable. Because these are high-value and unique products and technologies that we make and sell — it’s not an eyeball game or an e-com or fintech loss-making game,” explains Nair.

Private players in space exploration
In the case of L&T, a giant among private players in India, the association with ISRO dates back to the 1970s. Over nearly five decades, L&T has played a significant role in India’s space programmes and contributed to all generations of ISRO launch vehicles, right from the first Indian space launch, including SLV3, ASLV, PSLV and  GSLV to the latest GSLV Mk-III, which is being used for Chandrayaan 2. “For the Chandrayan 2 launch mission, L&T has provided several critical flight hardware, which includes metallic and composite sub-systems and assemblies. L&T has supplied more than 180 large and small hardware assemblies or sub-assemblies for the launch vehicle,” Patil points out.

Among the dwarfs, the Exseed group has many firsts to its name. It includes India’s first private satellite company, India’s first private ground station company –  GroundCloud, and India’s first private communication payload company  – HF Signals. “And we have more investments on the way,” says Murthy. Another pioneer in space research, Dhruva Space, has been invited by the European Space Agency to incubate for product development in their BIC in collaboration with ISRO. Dhruva Space aims to be the first Indian company to launch a small satellite constellation. Dhruva’s modular design approach reduces development time and cost of manufacturing, enabling launch of a fleet of satellites on demand for targeted commercial applications. The company has a strong technical team that has been part of six satellite missions across four countries.  

Kawa Space, which leads India’s first private space mission, is building a vertically integrated solution that will let anyone launch space missions in seconds. “At present, organisations that wish to deploy space-enabled solutions typically build, test and launch satellites, supporting ground stations and the infrastructure required to operate them, which means they own and operate the asset in space,” says Kawa Space Founder, Kris Nair.

Nair says a lot of good work is being done by a new breed of space companies in India, many of whom are focused on specific areas of interest, like imaging and space data processing, assembly integration and testing, and IoT connectivity solutions. Nair says the private sector is actively helping educate and widen the market for space solutions delivered as a service. “We’re hopeful to see both a collaborative approach amongst this new breed of companies and are excited for all the research that is getting added to India’s space repertoire,” he says optimistically.

Mandar Deo, Vice President, Power Systems, at  Cummins India, shares an anecdote. “A few months back our customer was looking for a high performing dependable product for a project. The end application was not fully disclosed to the team by the customer at that time. But what was even more challenging was the requirement of the generator to perform under extreme temperatures and very limited ventilation,” recalls Deo. “Owing to our brand promise of ‘innovation and dependability’, Cummins was the partner of choice. The Cummins engineering team, in collaboration with our GOEM (Generator Original Equipment Manufacturer) partner and a key supplier developed a solution to meet the very demanding specifications and successfully demonstrated the capability during witness testing phase,” he says.  The story only vindicates that private players, both big and small, were making their presence felt in the realm of space research and exploration.

Xovian fills a critical void in space education. Ankit Bhateja, who founded Xovian in 2012, has tried to bridge the industry-academia skills set gap with space technology-based hands-on activity modules like CANSAT, BALLOONSAT and SMALLSAT. The company has engaged with almost 9,000 students, researchers, and hobbyists across the country. “We provide full support in small satellite development and are currently involved in the development of miniaturised radar technology, with its first launch expected by the end of 2020,” says Bhateja.

Xovian is also the only company from India that happens to be a member of the International Astronautical Federation, an international space advocacy organisation based in Paris. Founded in 1951, the non-governmental organisation, strives to establish a dialogue between scientists around the world and to lay the information for international space cooperation. It works in close association with the United Nations.

Companies that have demonstrated significant capabilities in the defence production sector since it was opened up to private players, are also looking to foray into space exploration. Solar Industries, which has developed an indigenous propulsion system for the Pinaka Rocket, is entering into the business of propulsion systems for space application, which is synergistic with the current business of ammunition, says Manish Nuwal, Managing Director and CEO, Solar Industries. “The Small Satellite Launch Vehicle (SSLV) is a great business opportunity for private players for the next few decades,” says Nuwal, adding, “The government is framing a space policy to create an environment for private industry to serve India’s commercial and strategic needs, and also make India a global space technology hub.”

Draft Space Activities Bill, 2017
As humans eye space exploration  or exploitation  depending on how you hold the prism, the need for rules of the game emerge as a concern globally. Within the country too private players feel that they need guidelines for participation in India’s space exploration programmes and look to the Space Activities Bill, 2017 for  clarity on policies.  Meanwhile, ISRO’s commercial space entity Antrix, proposes to transfer small satellite and small launcher technologies to India Inc.

The ISRO has initiated measures for public-private participation in complete PSLV Launch vehicle production along with satellite integration. The ISRO has floated a new commercial entity called the New Space India Limited (NSIL) for commercialisation of various space products, including production of launch vehicles, transfer of technologies and marketing of space products. The idea is to hand over the entire PSLV assembly to the private sector which will be followed by the SSLV.

Leading the charge is L&T as a force multiplier. It has already partnered with government agencies in the domains of both defence and aerospace, in programmes like Chandrayan, Mangalyan and Hypersonic Test Facilities among others. “The current policy does not allow exports in the space segment,” laments Jayant Patil. “Opening up the space segment, as yet reserved for the state, will unlock huge opportunities for Indian players to be a part of the global supply chain. Additionally, access to larger markets will also encourage industry to invest in research and development and build products to cater for the space segment,” he tells BW Businessworld in an exclusive interview (page).

There is thus, need for a national space legislation to support the overall growth of space activities in India. This would encourage enhanced participation of non-governmental and private sector agencies in space activities, in compliance with international treaty obligations, which is becoming very relevant today. Around the world, legislations on space vary greatly in terms of content, scope and applicability. Taking these variations into account, a model law (the Draft Space Activities Bill, 2017) was formulated for a national space legislation and submitted to the UN Committee on Peaceful Uses of Outer Space (UNCOPUOS) by the International Law Association (ILA) in 2013. Chapter VI of the Draft Space Activities Bill notifies that any form of intellectual property right developed, generated or created onboard a space object in outer space, shall be deemed to be the property of the Central government.

Entrepreneurs like Xovian Research and Technologies Co-founder, Raghav Sharma, see policy lacunae in the draft Bill. “The Indian space ecosystem is in its early state and there is a missing policy to support startups in the space sector,” he says. The Space Activities Bill has since been introduced, with the point of contention intact. It stipulates that the ownership of intellectual property in space will be with the Union government. Sharma is pinning his hopes on the government reconsidering the clause in the Bill. “We hope that the government will issue a fresh revised draft addressing and rectifying such things which will encourage more and more startups to actively participate in this domain,” says Sharma.

A rather rough ride 
Another bone of contention for private players is licensing for the space industry. A licence of practice is mandatory in space activities as it is a matter of national interest. As Ankit Bhateja of Xovian points out, “The existing companies can bear the cost of the licence, but for startups, a cash crunch always exists. So it is required to put the startups out of the umbrella of the license policy for a period of five to seven years till they attain a mature state.” Murthy of Exseed Fund feels that restrictive licensing could jeopardise the growth prospects of private companies and nip their aspirations in the bud. “There could be thousands of jobs on the horizon if the space policy is not restrictive with any draconian licencing,” says Murthy.

Even so, a spurt of enthusiasm pervades the private sector in India on space research and exploration. Startups though, find it difficult to keep pace with companies that are already established. Startups feel that they need some amount of handholding by the government. Xovian for instance, feels that the Department of Space could have an independent startup cell. The cell could along with the Department of Space, report directly to the Space Commission, which in turn reports directly to the Prime Minister.

The startup ecosystem feels that the absence of damage cover liabilities for third party space assets is a major lacunae in India’s space policy. The United States, France and the European Union, have legislations that underwrite costs of damage should they exceed insurance, when a private satellite launch goes awry, or a rocket hits another object in space. Finally, restriction on private players for rocket launches is seen as a disincentive by private players. A widely asked question is: why would the government not allow divergence of technology and skill for the private players?  

In universal law, space has no boundaries. The 1967 Outer Space Treaty, which had more than 100 nations as signatories, provides the main framework for law on space. It says no nation can claim ownership of outer space and it must be free for use by all countries. Along the way in 1984, some sort of an agreement has come into effect on the moon. The 1984 agreement calls on the international regime to administer exploitation of lunar resources.

Another cause for concern among investors in space exploration is clogging up of space once plans of companies like Amazon and SpaceX to launch thousands of satellites fructify. The limits beyond the earth’s atmosphere could then get cluttered with earth objects and run the risk of collisions. But whether companies can claim ownership of space mineral activities and how countries should decide access rights and commercial gains, is yet to be debated. A debate does rage on now on the piling up of  space debris, such as malfunctioned satellites and broken rockets.

India’s space programme can gain momentum with the involvement of players beyond ISRO. The ISRO could, private players believe, continue to focus on the critical and core aspect of research and development on space, leaving peripheral areas of exploration to private sector players. “Space is a half-trillion dollar business,” muses Murthy, “and we hope to capture a significant part of the satellite manufacturing segment. Our aim is simple and ambitious: we’d like to become one of the world’s leading manufacturers of satellites.”

Other industry players too would like to ride out to space and land on the moon or beyond,  but only if they are assured of a supportive policy by the government.