India's Spacetech Ecosystem Accelerates with Rising Investments and Launch Milestones
The Indian spacetech sector is witnessing a significant transformation as early-stage startups approach critical commercial launch milestones, driving a surge in venture capital investments. According to data from Venture Intelligence, the year 2025 saw a remarkable influx of $276 million across 33 deals, marking a notable increase from the cumulative $262 million invested in 28 deals during 2023 and 2024. This acceleration signals a growing investor confidence in a sector traditionally viewed as high-risk and slow to mature.
Early Entrants Pave the Way for Commercial Launches
Pioneering companies such as Agnikul Cosmos and Skyroot Aerospace, which initially focused on developing foundational space infrastructure, are now on the cusp of their first commercial rocket launches. Most of these launches are anticipated to occur sometime in 2026. This tangible progress has begun to attract investment funds that previously avoided deep-tech sectors due to their complexity and long gestation periods.
Pratik Aggarwal, partner at global venture capital firm Accel, highlighted this shift, stating, "Early incumbents in the sector have been able to raise capital, which in turn has created confidence in the entrepreneurial community that the investing ecosystem is there to support them. There's also been an inflection point of talent."
Diversification of Investor Interest Across the Value Chain
Investor appetite is expanding beyond launch vehicles to encompass the entire spacetech value chain. Rahul Chandra, managing director at Arkam Ventures, noted, "We learnt a lot about spacetech with that investment including how deep the supply chain is, what are the critical components, what are the advantages India has in the sector." Arkam Ventures, which traditionally avoided deep-tech investments, is now actively evaluating spacetech opportunities and plans to make four to five bets from its second fund.
Similarly, Zerodha-backed Rainmatter Capital is increasing its focus on deep-tech investments, meeting more spacetech companies than in previous years. Dinesh Pai, who heads investments at the firm, explained, "We're looking at companies more from a lens of how India can diversify away from the dependencies on other countries."
Intensifying Competition and Evolving Funding Dynamics
The spacetech funding landscape has become increasingly competitive, with multiple funds now participating in early-stage rounds. Manu Iyer, co-founder and general partner at Bluehill.vc, remarked, "It's 100% more competitive for high quality deals. Even relatively good quality deals have four to five funds making a play." This trend is evident in deals like TakeMe2Space's $5 million seed round, which involved Chiratae Ventures, Unicorn India Ventures, Artha India Ventures, and SEA Fund.
While pre-seed and seed cheque sizes have remained relatively stable at around $2-3 million, the heightened competition has pushed some rounds to $5 million. Examples include Catalyx Space raising $5 million, and Cosmoserve Space and Olee Space each securing $3 million. However, these larger cheques come with increased expectations regarding founder expertise and technical depth.
Valuation Trends and Founder Considerations
As capital chases a finite pool of promising startups, valuations are gradually increasing. Iyer observed, "I don't know about valuations going crazy, but they're definitely creeping up. Pricing has gone 30% higher than I'd like to be paying in most of the spacetech segments." This valuation creep is seen as a sign of ecosystem maturity, benefiting founders by allowing them to raise money more efficiently and dilute less equity.
Manu Nair, co-founder and CEO of EtherealX, emphasized the importance of equity management, stating, "Because of how capital intensive this sector is, founders like me are generally looking to dilute just enough to raise the next round and the one after that without any problems." EtherealX's valuation jumped 5.5x to $80.5 million in its latest funding round, reflecting the growing investor confidence in advanced spacetech ventures.
Broadening Investment Horizons Beyond Launch Vehicles
Investor interest is diversifying across various spacetech segments as the ecosystem matures. Key areas attracting capital include:
- Earth observation and satellite-based monitoring systems
- Space domain awareness and situational awareness technologies
- In-orbit and in-space services including debris collection
- Avionics systems and satellite substructures
- Propulsion systems and electronic warfare applications
Accel's Aggarwal summarized the sector's potential, stating, "We want to be the first partners for those who are reimagining what the space ecosystem will look like in the future." This sentiment reflects the growing optimism among investors about India's spacetech capabilities and its potential to reduce dependencies on other countries while creating innovative solutions for global space challenges.
