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Moin S.P.M. (left) and Srinath Ravichandran, co-founders of Chennai-based spacetech startup Agnikul.
Moin S.P.M. (left) and Srinath Ravichandran, co-founders of Chennai-based spacetech startup Agnikul.

Policy changes are vital for spurring innovation in spacetech

Space startups attracted $5.7 billion in funding last year, including debt financing, and the momentum has continued this year despite the pandemic

India was an early entrant to the space age, thanks to the government’s initiative to set up the Indian Space Research Organization (Isro). Its first rocket went into space in 1963 from Thumba in Kerala. Though it was denied technology and materials for strategic reasons, Isro developed launch vehicles that were more economical than their counterparts in the West.

Despite this heritage, India has fallen behind in a new age where private ventures are opening up space to the commercial market. Elon Musk’s SpaceX led the way in the US, dramatically reducing the cost of satellite launches by several orders of magnitude with tech innovation. The US shifted its policy to let Nasa and the defence forces use private ventures for launches into low-earth orbit. SpaceX has landed several military contracts since then, which is a major source of revenue.

Democratizing access to space has in turn opened up huge opportunities for downstream applications like AI analysis of satellite image data for agriculture, insurance, finance, oil and gas, defence and the environment. Space startups attracted $5.7 billion in funding last year, including debt financing, and the momentum has continued this year despite the pandemic, according to space analytics and engineering firm Bryce. Indian space startups raised $18 million this year, according to Tracxn. That’s three times as much as last year, but still minuscule compared to global trends.

China rising

China decided in 2014 to incentivize private capital investments in space. Several Chinese space startups have emerged since, many focused on alternative launch vehicles and constellations of small satellites. As many as 22 Chinese startups announced funding last year, which amounted to $314 million, according to Bryce.

China is intent on catching up with the US, where SpaceX and Blue Origin have taken the lead with billions in funding.

This makes the case stronger for India to move faster on reforms in the space sector where it has intrinsic advantages in availability of tech expertise and lower cost.

Hence, the government’s recent announcement of a spacecom policy with a thrust for encouraging private sector participation has come none too soon. It has decided to set up an Indian National Space Promotion and Authorisation Centre (IN-SPACe), which could also act as a regulator.

The policy calls for opening up Isro facilities for startups, but licensing of private rocket launches is yet to be worked out. The reforms could also attract investors to the potential of Indian space startups.

A handful of entrepreneurs has already braved the lack of regulatory clarity and funding support to launch startups in the past few years. Pixxel, founded in 2018 by BITS Pilani students Awais Ahmed and Kshitij Khandelwal in their final year of college, was the only startup from Asia in the first cohort of the Techstars Starburst Space Accelerator in Los Angeles last year. This year, it raised $5 million to support its endeavour to put a constellation of Earth observation satellites in space to feed better images for AI data analytics.

Ahmed welcomes the regulatory reforms clearing the way for private players, but feels the government should also consider grants for more entrepreneurs to innovate in the space sector.

“If you grant funding to 10 startups, and even if two or three of them are able to build constellations of satellites, they would be an indigenous source of data for government, defence, commercial and civil applications, without depending on other countries. Isro is limited in its bandwidth to do this," points out Ahmed.

“When you look at rockets, the speed at which we can build small-satellite launch vehicles can be much faster if startups are also doing it. If you look at how SpaceX has been able to bring down the cost compared to what Nasa has been doing or how Rocket Lab has developed small-satellite launch vehicles, we would similarly need options here. It can’t be just one entity doing everything," he adds.

Against all odds

So far, space startups in India have got going against the odds. Chennai-based Agnikul and Hyderabad-based Skyroot received enough funding and support to stay on their course to build small-satellite launch vehicles, despite the lack of regulatory clarity.

Agnikul got access to the National Centre for Combustion R&D at IIT Madras. “It’s a $30 million facility with a lot of infrastructure for testing engines and so on. It happened because Prof. Satyanarayanan Chakravarthy, who heads the centre, was ready to mentor us. That was our first step in October 2017," says Srinath Ravichandran, co-founder of Agnikul and a Wall Street trader turned aerospace engineer.

He feels the setting up of IN-SPACe is pivotal. “Now, we know there’s a body for authorization of space initiatives by private players. It’s important because it’s hard to go to market internationally without such an agency. Spacetech is complex and requires various approvals. IN-SPACe will be a single point for taking care of all that. We’re on the right track."

Malavika Velayanikal is a Consulting Editor with Mint. She tweets @vmalu

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