Space startups expect revenue build-up as investors turn bullish
With $50 million in series-B funding, Digantara joined Skyroot as only two Indian space startups to have raised such capital in a single funding round. Marquee investors, including Peak XV, are now bullish on India's prospects of raising large capital as they start generating substantial revenue.
New Delhi: India’s top space startups—Digantara, Skyroot and Agnikul Cosmos—have received a thumbs-up from investors as they look to scale up revenue over the next 18-24 months, marking a crucial milestone five years after New Delhi opened up space for private participation.
On Tuesday, Bengaluru-based satellite surveillance and services startup Digantara raised $50 million in its series-B funding round. The company will use the newly-raised funds to build its own manufacturing lines for satellites and optical communications technologies, and double its research and development team through 2026.
Anirudh Sharma, chief executive of Digantara, told Mint that at the heart of its new fund-raise and expansion plans is the prospect of generating significant revenue, starting 2026.
“By FY27, we’re eyeing annual revenue of $30 million, 80% of which is being driven from government-sector clients in India itself," Sharma said, adding that the current funding round provides breathing room of two years, during which the company will invest in research for building solutions for the defence sector.
“In the long run, we hope to raise a much larger funding round to expand upon defence products such as satellite-based missile tracking and awareness solutions for various countries," he added. Digantara had earlier raised a total of $14.5 million in funding over three rounds, starting July 2021.
Meanwhile, Temasek-backed Skyroot Aerospace, India’s highest-funded space startup with $95 million in venture capital funding to date, is set to make its first commercial rocket launch from Indian soil by March 2026.
The company, which raised $51.5 million in its last round in September 2022, has its goals set on generating up to $6 million in revenue from each commercial launch of its indigenously built, 3D-printed rocket.
“We expect to start generating operating revenue from the first launch itself, which will have a couple of paying satellite customers onboard," said Pawan Chandana, chief executive of Skyroot, and a former rocket propulsion engineer at India’s central space agency, Indian Space Research Organisation.
Digantara and Skyroot are the only two space startups that have raised $50 million or more in a single funding round in India, breaking the long-perceived notion that Indian deep-tech startups are starved for capital beyond smaller funds in very early stages of development.
Digantara and Skyroot are joined by Chennai-based rocket launch services startup Agnikul Cosmos, which on 22 November raised $17 million in series-C funding, at a valuation of $500 million. Like Skyroot, Agnikul also expects to make its first commercial rocket launch next year, thereby generating early revenue.
An email sent to Srinath Ravichandran, chief executive of Agnikul, remained unanswered till press time.
Industry views
Industry stakeholders believe 2026 is the year when space startups will begin generating substantial revenue.
Pawan Kumar Goenka, chairman of the Centre’s nodal space body, Indian National Space Promotion and Authorization Centre (In-Space), said space is a difficult industry and the progress has been expectedly slow so far.
“However, starting 2026 and 2027, India will see the first top space startups begin to generate good revenue—before the industry starts scaling up from 2030," Goenka said.
Investors believe funding opportunities with prospects of high returns will grow as companies start generating significant revenue.
Rajan Anandan, managing director at venture capital firm Peak XV (formerly Sequoia Capital India), said investment opportunities are on the rise in India’s space sector.
“Digantara is a truly unique company at a global level—there is no other company that is doing what they do. Deep-tech, by definition, takes many years to mature because of the nature of the technology and the times it takes to validate and commercialize. We’ve spoken with almost every stakeholder of India’s private space ecosystem, and I believe this is a sector that will grow sharply in the years to come. Access to capital will play a very important role in developing India's space-tech ecosystem, and the Centre’s ₹1 trillion research, development and innovation (RDI) fund will catalyze all aspects of India’s deep tech, including the private space sector," he added.
Vamshi Krishna Reddy, partner at fellow venture capital firm Kalaari Capital, concurred. “The roadmap for India’s space industry to start generating significant revenue is now no longer a 10-year question—it is a five-year question, perhaps," he said. “Much of it depends on the technology being built, and as an investor, we’re confident that there will be multiple key startups that emerge out of this industry within the next couple of years itself."
For now, the sector has a tall revenue target to meet. In-Space’s 10-year vision, published in 2023, projected India to generate $44 billion in annual revenue by 2033.
Earth observation and surveillance satellites, which Digantara is catering to, are projected to earn companies $8 billion. Rocket launch services, which Skyroot and Agnikul are targeting, are slated to generate $3.5 billion.
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