Military surveillance–the new lucrative front for India’s space startups
Startups, including Pixxel and Digantara, target at least half of their business by launching satellites for defence forces in India and overseas. Experts say private startups can't simply piggyback Isro, and they will have to prove their products in space
New Delhi: India’s bet to open spacetech to private companies five years ago has spawned startups that are already earning millions of dollars by sharing agriculture and climate data collected by the satellites they launched. These ventures are pivoting towards a new lucrative business: defence surveillance.
Google-backed satellite imaging startup Pixxel and its cross-town peer Digantara target at least half of their business by launching satellites for defence forces in India and overseas, according to their top executives. Even rocket builder Skyroot Aerospace and multiple smaller startups hope to tap such contracts.
India’s private space economy revenue is expected to surge more than fivefold over the next eight years from $8.5 billion to $44 billion, growing at an annualized rate of 23%, according to data from Indian National Space Promotion and Authorization Centre (In-Space). While this growth has failed to materialize so far, analysts said the next three years will be crucial.
Engineering satellites and rockets often takes years and millions of dollars in revenue to get right. While state-run Indian Space Research Organisation (Isro) has a generally favourable global reputation, private space startups can’t simply piggyback on Isro. They will have to prove their products in space, industry stakeholders said.
“Chasing commercial contracts will be a path to much slower growth and practical revenue streams," said Chaitanya Giri, space fellow at policy think-tank, Observer Research Foundation. “Instead, most space firms should either focus on defence contracts, diversify their businesses worldwide, or set up completely independent entities that would solely focus on defence contracts."
Business of surveillance
Bengaluru-based Pixxel expects to generate revenue in the hundreds of millions in the next three years. “Out of this, a rising volume of defence contracts, both in the US and India, will mean that 40-50% of our revenue will come solely from defence clients," said Awais Ahmed, cofounder and chief executive of Bengaluru-based satellite imaging startup Pixxel, which is backed by Google.
The company’s revenue stood at $4.65 million in FY25, according to its filings with the Registrar of Companies accessed by Mint through Tracxn.
Anirudh Sharma, CEO at Digantara, has projected that by March 2027, the company would generate over ₹250 crore, of which 80% will come from government-backed clients. “The current capital that we have will go significantly into research and development (R&D) for building satellite-based defence technologies and solutions, which we expect to be our major revenue source in the next two years."
Digantara generated ₹3.18 crore in revenue in FY24. It has not filed its FY25 financials yet.
Pixxel currently operates six ultra-high resolution satellites–launched 2021 and 2025, relaying data on earth observation to paying clients. CEO Ahmed told Mint that Pixxel earned nearly 80% of its revenue from commercial clients who purchase their data, and sell analytics based on the same around the world.
Digantara, which launched its first surveillance satellite in January last year, has announced plans to launch its space mapping constellation of satellites for defence operations by the end of next year.
Some early clients of these companies include the ministry of defence, the department of science and technology (DST), US space agency Nasa, and European Space Imaging—a German space surveillance data provider.
Industry experts said that while defence is a natural pivot and recourse for space firms, Indian ventures may face a few key challenges.
“The US has a much more open market, with defence spending of nearly 20x that of India. Defence agencies in the US have greater spending autonomy, which boosts America-born space firms from scouting defence contracts," said Narayan Prasad Nagendra, chief operating officer of Dutch space services firm, SatSearch.
“The same may be difficult to execute in India, as budgets are smaller and government spending is more closely controlled and slower in execution," he said. “For startups, these are key hurdles they may have to overcome."
MoD push
Earlier, the government procured space technology only through Isro. In April 2018, the Centre launched its Innovation for Defence Excellence (iDEX) challenge to encourage private startups to develop technical applications and products for India’s defence bodies. In 2020, the space sector was formally thrown open to the private sector.
Pixxel won two iDex projects—allowing them to be fast-tracked. One such contract generating revenue for the firm now, according to Ahmed, is a “private satellite contract with the Indian Air Force, where we are building and maintaining a surveillance satellite contract for their usage".
Mint reported on 12 June last year that the ministry of defence (MoD) was also considering India’s private space startups for an experimental surveillance project. The contract, worth about ₹150 crore, aims to create an experimental space map to track satellite movement in various orbits.
Sharma declined to comment on whether Digantara participated or won it, citing non-disclosure agreements for “any conversations we’re having with defence bodies".
So far, India’s four most-funded space startups have raised over $315 million over the past five years. Most of this capital has gone into building and testing their first rockets, satellites and satellite technologies, and making them business-ready.
Even early-stage ventures such as GalaxEye and Bellatrix Aerospace are venturing into surveillance satellite manufacturing. Both GalaxEye and Bellatrix announced in June and July last year that they expect defence contracts to be major revenue drivers.
Pawan Kumar Chandana, chief executive of Hyderabad-based Skyroot Aerospace, India’s most-funded space startup, said that while the company is a contractual satellite launch operator, defence clients are likelier to be frequent takers of their service.
“In some cases, satellites—or the data generated by them—may be contracted by the defence agencies of their respective countries, as defence is one of the largest users of space-based capabilities," Chandana said.
Private space startups can help India emerge as one of the world’s most strategically important defence suppliers globally, according to Giri.
“The US is the world’s largest defence purchaser, but it has stringent regulations that will require Indian entities to set up independent operations there," he said. “While some have done it, focusing on defence requirements in the global south could be a significant revenue driver for space firms diversifying into defence."
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