A Rs 1,000 crore venture capital fund is proposed to be set up to invest in companies solving space economy challenges, with the aim of expanding the space economy five-fold over the next decade, the finance minister said.
The reference in the Budget speech follows talk of strengthening deep tech for defence purposes and promoting ‘Atmanirbharta’ or self-reliance.
“India’s space market is expected to grow to $44 billion over the next decade, with the potential for a 100-fold increase in investments across sectors including launch vehicles, satellite manufacturing, Earth observation, communications and on-orbit economy,” said Vishesh Rajaram, founder and managing partner at Special Invest.
Speciale Invest is an early investor in space tech startups such as Agnikul Cosmos, GalaxEye Space, Kawa Space, Astrogate Labs and InspeCity. Rajaram said the government fund would have a multiplier effect on investments from venture capital and private equity firms.
Bengaluru-based Digantala, which is creating space maps and has raised funding from Peak XV Partners, Small and Medium Enterprises Development Bank of India (Sidhvi), among others, said it is important to have more domestic customers for a strategic sector like space, and it is crucial for the state to act as the lead customer, drive demand and foster a robust ecosystem.“The state needs to mandate research, capacity building and investment in high-risk areas,” said Anirudh Kulkarni, founder and CEO.
The finance minister also said the government will operationalise the Anusandhan National Research Fund for fundamental research and prototype development. “Furthermore, in line with the announcements made in the interim budget, we will create a mechanism to promote private-sector led research and innovation at commercial scale with a funding pool of Rs 1,000 crore,” she said.
The Anusandhan National Research Foundation Act, 2023 aims to regulate all research and development in the field of natural science institutions in India.
“This initiative will accelerate fundamental research, prototype development and private sector-led innovation at commercial scale. With a potential 2-4 times return on every dollar invested, India is aligned with global R&D benchmarks. This is a golden opportunity for venture capitalists to invest in promising technologies, propelling the Indian R&D ecosystem forward,” said Chirag Gupta, Founder and Managing Partner, 8X Ventures, a deep tech venture capital firm.
