Indian Space-Tech Startups Face Funding Challenges in 2024

Despite a 6% increase in overall tech startup funding in India, space-tech startups witnessed a significant decline in 2024, marking the first drop since 2018. According to data from Tracxn, space funding fell by over 53%, raising only $59 million in equity compared to $128 million in the previous year. Early-stage funding dropped by 65%, while seed stage funding saw a rise.

Despite the government opening up certain domains in the sector in February, foreign fund equity participation fell by 65% to $43.2 million. However, industry stakeholders remain optimistic about a revival, citing growing interest from government and private players and increasing commercialization by startups.

Vishesh Rajaram, managing partner at Speciale Invest, noted that space startups do not require growth capital every year and cannot be compared to consumer-tech companies. He emphasized the overall momentum of the ecosystem and the increasing number of venture firms interested in the sector.

Neha Singh, co-founder of Tracxn, highlighted that while Indian startups are recovering from the funding winter, the space sector is still lagging. She expects a recovery as companies prove their capabilities and traditional investors participate in maturing players.

Awais Ahmed, CEO and founder of Pixxel, pointed out that the Indian startup ecosystem is evolving, with many companies starting around 2015-16. He anticipates more companies raising series A and beyond in the coming years, as the sector matures.

Lt.Gen. A K Bhatt (retd), DG of Indian Space Association, mentioned that public-private partnerships and downstream applications will boost demand in the sector. He also highlighted the government's Rs 1,000 crore space VC fund, which will support new companies in the pre-seed round.