Centre's Nod To Rs 1000-Cr Venture Capital Fund For Space Start-Ups; Industry Welcomes

In a bid to drive private investments in space sector, government on Thursday approved setting up of a Rs 1,000 crore venture capital for start-ups, a move welcomed by industry as a game changer.

fund will function under aegis of Indian National Space Promotion and Authorization Centre (IN-SPACe) and will be operated along with Indian Space Research Organisation, Information and Brocasting Minister Ashwini Vaishnaw told reporters here.

fund, approved by Union Cabinet at a meeting chaired by Prime Minister Narendra Modi , will invest in 30-35 space start-ups in two tranches – first of Rs 5-10 crore followed by Rs 10-60 crore at a later stage.

Venture Capital Fund for space sector start-ups was announced by Finance Minister Nirmala Sitharaman in Union Budget presented after NDA government led by Modi assumed office for third consecutive term.

fund will focus on start-ups with proof of concept and commercialisation potential and is expected to drive innovation in satellite technology, launch vehicles and space applications, Vaishnaw said.

"We believe that this fund will not only be a key enabler for growth of Indian space startup ecosystem but will also inspire investors to seriously look at this sector as an investment and come forward to become a part of Indian space startup story," Lt Gen A K Bhatt (retd), Director General, Indian Space Association (ISpA) told PTI.

Prime Minister Narendra Modi also reacted on this and said, "Excellent news for space sector!

Cabinet’s decision on establishing a Venture Capital Fund dedicated to space sector will have a phenomenal impact on youth. It will give opportunities to several innovative minds and d momentum to our space programme." 

Pixxel founder and CEO Awais Ahmed said Rs 1,000 crore venture fund was exactly what India's spacetech ecosystem needed right now.

"This fund could be launchp for next wave of space companies tackling everything from climate monitoring to satellite communications," Ahmed said in a post on X. An official statement said deployment period of Rs 1,000 crore venture capital fund is planned to be up to five years from actual date of start of operations.

" average deployment amount could be Rs 150-250 crore per year, depending on investment opportunities and fund requirements," it said. fund was proposed by IN-SPACe to support India's space economy that is currently valued at USD 8.4 billion. And is targeted to touch USD 44 billion by 2033. " fund aims to dress critical need for risk capital, as tritional lenders are hesitant to finance startups in this high-tech sector," Vaishnaw said.

fund will be operated by a professional fund manager and government is expected to have a multiplier effect with private fund co-investments. fund will comprise a trustee, fund manager, investment committee, visory board and or structures as per SEBI guidelines for alternative investment funds.