The spacetech startup ecosystem is entering 2026 with a stronger operating base after a year in which policy intent translated into execution and early promise gave way to proof. Founders and investors expect the coming year to be defined less by experimentation and more by scale, revenue visibility and long-term contracts, building on gains made in 2025.
The past year marked a shift in the government’s engagement with private players, with contracts issued for operational programmes, procurements and technology transfers. Initiatives such as IN-SPACe’s Rs 500-crore Technology Adoption Fund, which can cover up to 60% of project costs, helped narrow the gap between prototypes and commercial deployment in a capital-intensive, long-cycle sector. Equally significant was the widening of access for private companies to government programmes, including through the Earth Observation public-private partnership framework and deeper collaboration with Istro. These moves allowed startups to build, own and operate space assets while serving national and commercial requirements.
Global demand also played a role. Rising appetite for earth observation and space-enabled intelligence created market pull, enabling startups to compete on capability and reliability rather than only on cost. Combined with policy support and improved access to capital, this demand helped the sector mature over the past 12 months.
Funding trends underline the momentum. Data from Tracxn shows spacetech startups raised about $152 million in 2025, more than doubling from $68.9 million in 2024. While still modest compared with mature markets, founders say the quality of capital and its alignment with long-term programmes has improved.
Capital Shift
Against this backdrop, 2026 is expected to mark a transition to scale. “Growth will be less about the number of startups and more about depth – revenue maturity, long-term contracts and market expansion,” Awais Ahmed, founder and chief executive of Pixxel, told Fe. Companies with assets already in orbit or proven products, he said, should begin to see steadier revenues, repeat customers and longer-duration contracts. Pixxel launched six high-resolution commercial hyper-spectral satellites this year and expanded overseas partnerships, particularly in climate, agriculture and environmental monitoring, a trend Ahmed expects to deepen in 2026 as more domestic firms serve global customers.
A similar shift is expected in propulsion and launch services. Yashas Karanam, co-founder and chief operating officer at Bellatrix Aerospace, said conversations with customers are moving from feasibility to delivery consistency. Startups, he said, are starting to convert one-off demonstration missions into broader revenue pipelines.
Launch companies such as Skyroot Aerospace and Agnikul Cosmos also emerged as credible alternatives in 2025, particularly for small and medium satellite launches. Their progress is expected to influence regional launch economics by offering cost-effective options closer to markets in Asia, Africa and the Middle East. “International interest in Indian spacetech is rising sharply,” Suyash Singh, co-founder and chief executive of GalaxEye, said. By 2026, he added, startups are likely to move beyond exporting services to becoming partners in global missions, constellations and data-sharing programmes.
Another area expected to gain prominence next year is sovereign space capability. Anirudh Sharma, founder and chief executive of Digantara Industries, said governments are increasingly focused not just on access to data but on where systems are built, operated and controlled, particularly for national security and critical infrastructure. This is likely to shift demand from raw data to operationally relevant information, driving investment in edge processing, automation and analytics, as well as closer integration across space, air and terrestrial domains.
Beyond Data
Collaboration within the ecosystem is also set to deepen. Startups are expected to work more closely with academia, national laboratories and government agencies, supported by schemes that encourage technology transfer and shared infrastructure. Moin SPM, co-founder and chief operating officer of Agnikul Cosmos, said space-to-earth applications in imaging, communications and climate monitoring should gather pace as more earth observation and communications payloads come online, translating space assets into everyday value for sectors such as agriculture, logistics and disaster management.
Artificial intelligence is likely to be another defining theme in 2026. Founders expect AI to move beyond post-processing to become integral to mission design, enabling onboard analytics, automated tasking and faster data-to-decision cycles. This could significantly shorten response times for surveillance, disaster response and time-critical infrastructure monitoring.
Overall, industry participants expect 2026 to mark a decisive move from capability building to outcome-driven space solutions. Startups are seeking consistency in policy, simpler and predictable regulations, continued access to patient capital and stronger mentorship.