The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved setting up of a Rs 1,000 crore venture capital fund for space startups under the aegis of IN-SPACe — a single-window autonomous government agency under the Department of Space (DOS). According to a statement by the Cabinet on Thursday, the deployment is planned for up to five years from the actual date of the start of the fund operations. The fund is expected to be operational from FY26.
The average investment is expected to be Rs 150-250 crore per year, beginning FY26, depending on the investment opportunities and fund requirements. For FY26, the estimated deployment is Rs 150 crore while for FY27-29, Rs 250 crore per year is expected. For FY30, the estimated investment is Rs 100 crore.
The average ticket size per startup is likely to be in the range of Rs 10- 60 crore, depending on the stage of the company, its growth trajectory, and its potential impact on national space capabilities, Cabinet said in the statement.
While for growth-stage startups, Rs 10 crore – Rs 30 crore funding is estimated, for late growth-stage ventures, the government has estimated funding in the range of Rs 30 crore to Rs 60 crore.
“The proposed fund is expected to boost employment in the Indian space sector by supporting startups across the entire space supply chain—upstream, midstream, and downstream. It will help businesses scale, invest in R&D, and expand their workforce,” the Cabinet said.
It added that each investment could generate hundreds of direct jobs in fields like engineering, software development, data analysis, and manufacturing, along with thousands of indirect jobs in supply chains, logistics, and professional services.
As part of its 2020 space sector reforms, the government had set up IN-SPACe to encourage private sector participation in space vertical.
IN-SPACe had proposed the Rs 1000 crore VC fund to support India’s space economy currently valued at S8.4 billion and targetted to grow to $44 billion by 2033.
“With nearly 250 space startups emerging across the value chain, timely financial support is crucial to ensure their growth and prevent talent loss overseas,” the Cabinet said. It noted that the fund will serve as an Alternative Investment Fund under SEBI regulations.
The fund was announced in this year’s budget by Finance Minister Nirmala Sitharaman in July this year.
Indian space startups had received $126 million in funding in 2023, up by 7 per cent from $118 million secured in 2022, as per Tracxn’s Space Tech Geo Report 2024.