BENGALURU: India’s spacetech sector crossed a quiet but consequential threshold in 2025. After years of cautious capital and long gestation bets, investors—encouraged by early incumbents moving towards tangible milestones—have begun funding the sector with a confidence not seen before.
Data from Venture Intelligence shows that $276 million of venture capital poured in across 33 deals in 2025, more than the $262 million across 28 deals for the previous two years combined.
Of the top 10 deals in spacetech in 2025, just three went to late-stage incumbents, with the rest going to younger companies. This simultaneous flow of capital to first-time founders and late-stage incumbents suggests rising conviction across the sector’s lifecycle.
“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,” said Pratik Agarwal, partner at global venture capital firm Accel. “There’s also been an inflection point of talent.”
For instance, Chennai-headquartered Agnikul Cosmos and Hyderabad-based Skyroot, which were launched in 2017 and 2018, respectively, initially focused on building space infrastructure. Both companies are now approaching their debut commercial launches, most likely sometime in 2026.
That progress has begun to attract funds that have historically avoided deeptech. One example is Arkam Ventures, a Bengaluru-based early-stage fund that is now evaluating spacetech actively.
The firm is looking to make between four and five bets from its second fund that was announced in 2023 with a target corpus of $180 million, and is yet to announce a final close. The firm invested in Skyroot in 2024 in an unannounced cheque from its first fund.
“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,” said Rahul Chandra, managing director at Arkam Ventures. “We’re using a lot of that thesis for our subsequent fund.”
Zerodha-backed Rainmatter Capital, based in Bengaluru, is also stepping up deeptech investments and has been meeting more spacetech companies than in prior years. The firm made an early bet in Agnikul Cosmos and participated in satellite startup Galaxeye’s $6.5 million round in 2024.
“We’re looking at companies more from a lens of how India can diversify away from dependencies on other countries,” said Dinesh Pai, who heads investments at the firm.
Frenzy in a high-diligence market
In the $276-million funding for the sector in 2025, Noida-based drone maker Raphe mPhibir did the heavy lifting, raising $100 million in a funding round led by General Catalyst.
There were only three other rounds above $10 million. Two of them went to older companies — Bengaluru-based Digantara and Agnikul Cosmos, which raised $50 million and $17.5 million, respectively. The rest of the money went to younger companies.
The outlier clearly was EtherealX, a Series A company, which raised $20.5 million in a round led by TDK Ventures and BIG Capital, with participation from Accel, Bluehill.vc, Prosus Ventures and four others. Two years ago, such a large early-stage cheque for the sector was practically unheard of.
Pre-seed and seed cheque sizes, however, haven’t moved much. From 2023 to 2024, cheques rose from $2 million to $3 million, with 2025 seeing no change, according to Venture Intelligence.
But with competitiveness heating up, investors say some cheques are going as high as $5 million. For instance, Ahmedabad and San Francisco-based Catalyx Space raised $5 million, while Hyderabad-based Cosmoserve Space, and Pune-based Olee Space raised $3 million each.
These larger cheques, however, come with expectations around founder background and depth of technical work.
“Rounds are really competitive for founders who have been working on the technology their startup is building and have been doing it for years before they went hunting for venture capital money,” said Atharva Shah, senior associate at Rockstud Capital.
Rise in competitive intensity
Several early-stage investors said competition for deals has intensified.
“It's 100% more competitive for high quality deals,” Manu Iyer, co-founder and general partner at Bluehill.vc told Mint. “Even relatively good quality deals have four to five funds making a play.”
Where pre-seed and seed rounds previously tended to be led by a single institutional investor, early-stage rounds in 2025 and early 2026 are increasingly being done by multiple funds together.
TakeMe2Space raised a $5 million seed round from Chiratae Ventures, Unicorn India Ventures, Artha India Ventures and SEA Fund. SpaceFields’ $5 million pre-Series A was led by Globaz Technologies with participation from Rockstud Capital, Rainmatter, Venture Catalysts and at least five more funds.
“The market is definitely more competitive. But that's a good thing for the founder ecosystem because they have more funds to choose from that can support them,” said Accel's Agarwal.
Valuations edge higher
As more capital chases a finite pool of companies, valuations are also beginning to edge up.
“I don’t know about valuations going crazy, but they’re definitely creeping up,” said Bluehill’s Iyer. “Pricing has gone 30% higher than I’d like to be paying in most of the spacetech segments. But it's really just a function of the amount of capital available at the bottom of the pyramid.”
Deeptech investors typically price companies conservatively at early stages, with sharp step-ups as technology readiness improves and commercial viability becomes clearer.
Agnikul is a good example. Even as its capital requirements slowed with improving technology readiness, its $17.5 million round in November 2025 valued the company at $500 million, aided by the fact that it has a launch in the works.
Agarwal from Accel views the valuation creep as a sign of ecosystem maturity. “It’s a good thing for founders. It gets cheaper for them to raise money, build out milestones and they get to dilute less equity.”
For founders, controlling how much equity they give up remains central. “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,” said Manu Nair, co-founder and chief executive of EtherealX. “Investors generally tend to seek comfort in that and so have I.”
The reusable rocket startup’s valuation jumped 5.5x in its latest round to $80.5 million, from $14.5 million after its $5 million seed round in 2024.
More than a rocket
As incumbents move toward launches and satellite companies sign defence and agriculture contracts, investor interest is spreading across the value chain.
Arkam Ventures is evaluating domestic manufacturing plays for the sector, but is also open to downstream applications. “There’s data-related companies, debris collection and removal plays that will crop up as well,” said Chandra.
Other areas attracting capital include earth observation, space domain awareness, space situational awareness, and in-orbit and in-space services.
Bluehill is scouting companies building avionics systems, satellite substructures, control systems, communication arrays and electronic warfare, said Iyer. Rockstud is looking at startups working on propulsion systems.
Accel, meanwhile, is becoming steadily more bullish on space. Agarwal said the firm is studying where it wants to invest across the sector and scouting opportunities through its Atoms ‘X’ track accelerator programme. “We want to be the first partners for those who are reimagining what the space ecosystem will look like in the future.”