Space-Tech Startups: Why Are They Catching Eyeballs?

Space-based start-ups are seeing growth in the last four years but have mainly come up with a force during the last one year during lockdown. A lot of companies which started off as tech-based enablers have ventured into the satellite space. This comes in addition to space and satellite focused start-ups.

Recently, a 2017 consumer and capital good start-up Zetwerk has decided to venture out into the Aerospace and Defence sector. The 180-degree industry flip in choice of industry highlights the growing interest in technological aspect of things. A slew of start-ups like Agnikul, Vesta, Bellatrix Aerospace are some of the marquee players that have raised finances in this department.

This leads us to ponder, is space-tech the next trillion-dollar industry? Morgan Stanley seems to think so, as it blatantly stated the same in its report ‘Space: Investing in the final frontier’. The same report says the most opportunities will come from satellite broadband Internet access, while impacting IT Hardware and Telecom sectors. This is especially significant when it comes to cost regulation of data in an era of data explosion.

Image source: Morgan Stanley

Given the promising figures, it is no surprise that venture capitalists from around the world are looking to invest in Indian space backed start-ups. In addition, experts have their own take regarding the boom in this space. Agnikul’s Co-Founder Moin SPM tells Businessworld, “The establishment of IN-SPACe / ISRO for thrusting the private sector participation in space activities has helped the existing startups’ and has also paved way for more new ones to grow in India. This establishment of IN-SPACe has provided confidence to the investors and India being a space faring nation from the 70’s has provided the credibility to go to space global market.”

As per the same Morgan Stanley report, the cost to launch a satellite has declined to about $60 million, and with reusable rockets it will drop down to $5Million.  Also, the cost of satellite production can decrease that cost from $500 million to $500,000. With space based data collection growing in demand, coupled with a satellite based cyber-security industry in the nascent stage, investors see a lot of potential. The fall in price is also due to the traction the industry has been gaining. For instance, Pixxel, the Bengaluru-based space-tech startup plans to deploy 30 satellites by 2022 December forming a global constellation. They received Rs 53 crore/ $7.3 million seed round investors Techstars and Omnivore. In such a climate investing in space-based start-ups seems to be a prudent investment move. Indian start-ups acknowledge this fact, as Srinath Ravichandran. Founder, Agnikul says, “this might be the best time to do space tech in India as a startup. Investors are willing to trust startups. The Government is willing to help. We think all this will pave the way for world class space tech hardware and software to be built here.”