Funding NewSpace startups in India with Venture Capital

How will Space Tech disrupt today’s economy?

LEO Economy is the production, distribution, and trade of goods and services within Low-Earth Orbit. This economic space will grow to include more groups (including but not limited to governmental, commercial, and academic) that will contribute to the LEO economy’s continued expansion and support future sustainable space enterprises. Most industries will see the emerging space economy as a disruptive element …

The Flywheel for the Lower Earth Orbit Economy:

Satellites could be divided into 3 major subsystems: one, the payload (either a camera or a communication receiver/transmitter). The second is the remaining avionics and, finally, the main telemetry system.

As electronics across the world started to shrink in size, become cheaper in cost, become lighter in mass, and become more powerful in capacity, the trend continued into satellite avionics and payloads as well. Satellites could be divided into 3 major subsystems: one, the payload (either a camera or a communication receiver/transmitter). The second is the remaining avionics and, finally, the main telemetry system.

The only part left was the core telemetry system, which had to be large because many satellites were far away (in GEO). By bringing satellites closer to earth (LEO), one could reduce telemetry transmitter power, cost, and mass.

Simultaneously, the advent of in-space communication allowed satellites to talk to each other in space. So, instead of having one large satellite very far away, people started exploring using a large number of small satellites very close to the earth. These satellites could be lighter, could talk to each other in space, and also be cheaper.

This offered additional advantages:

A) When a swarm of satellites did the job of 1 large satellite, the risk of losing 1 whole mission in one launch became lesser. Inherently, the launch mass was distributed across launches.

B) Since a swarm of satellites serving a mission was inherently modular, satellites could be partially upgraded as and when required. (deorbit older hardware and launch newer hardware)

C) Since mission targets are distributed across satellites, missions don’t end up having binary outcomes — you could have partially successful missions if a few satellites fail. So, a constellation approach to mission design became a more reliable design.

In India’s context, where are the profit pools in Space Tech? Globally, in which sub-verticals do India’s strengths lie?

Four Profit Pools in Space:

1. Proliferation of Small Satellites and their constellations - Driven by the increasing supply of smallsats manufacturers and the availability of launch slots for small satellites, there has been a surge in the number of smallsats and their constellations being launched. The cost of making smallsats has also decreased by half since 2018.
2. Reusability of large launch vehicles - A major rocket launch company that has achieved commercialization is achieving reusability with their rockets. This allows for lower costs of launch and faster turnaround time, thereby increasing launch slots.
3. Demand for alternative data from space — Data from imaging satellites, which was largely limited to government use, is now increasingly being accessed by private corporations, especially in financial services and agriculture, for prediction and observation.
4. Deep space missions aimed at the Moon and Mars — For the first time, space agencies across the globe are working extensively with private space companies on deep space missions aimed at creating settlements on the Moon and eventually on Mars.

India’s Strength Today:

I) Launch Rockets for Small Satellites

Driven by the recent policy changes and India’s technical know-how in building launch rockets, the time required for Indian start-ups to prove their technical capability can be 3–4 years vis-a-vis the ten to fifteen years taken by global competing startups. These companies can launch their rockets at 1/20th of the funding required to global comparables while being ~50% cheaper at scale.

II) Satellite Manufacturing

In India, satellite manufacturing companies have capitalised on adaptive manufacturing techniques, discovered new materials and successfully experimented with miniaturization as the global demand for satellites and their constellations grows driven by communication and imaging. With the support of ISRO, Indian entrepreneur can be the manufacturer for the world in economic microsatellites and nano-satellites

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What is the venture funding landscape in Space Tech? Globally and at home?

2021 has been a marquee year for space companies globally and in India. Many companies have gone public via SPACs in the US and space companies in India have raised major growth rounds … 10 Space Companies have gone public SPAC in the last year …

i) Virgin Galactic is set to unviel its SpaceShip, Three fleet vehicle on March 30 according to the timeline announced in its February conference call. The company has collected deposits from 600 customers who paid $250,000 each to board a future flight to space with Virgin Galactic.

ii) Momentus has been called the “FedEx of Space” and is often referred to as a “zero gravity logistics player.” The company has a deal in place with SpaceX and plans to launch satellites as a service in the future

iii) AST billed as the “5G from space” company. AST has plans to launch 20 satellites in equatorial regions targeting 1.6 billion people first. The second phase is to launch 168 global satellites for the European and North American markets. AST calls for hitting 9 million subscribers in the year 2023 and 373 million by the year 2027.

iv) Astra is one of only a handful of companies that have successfully made it to space. The company plans on delivering customer payloads this summer and begin monthly launches by the end of 2021. Astra has over 50 launches in its backlog and a pipeline of over $1.2 billion in deals.

v) Rocket Lab is the second most frequently used U.S. orbital rocket company, trailing only SpaceX. The company has done 19 launches to space, with its first successful launch coming in 2018. The company has deployed over 100 satellites for government and private companies. Rocket Lab has missions booked for trips to the Moon in 2021, Mars in 2024 and Venus in 2023. The company has a pipeline of $2.2 billion in deals, including $1.2 billion for launch-related revenue. The backlog represents 90% of fiscal 2021 projected revenue.

vi) Spire Global has a constellation of over 100 satellites and is seeking to pioneer the space-as-a-service business model. The company serves over 150 customers and processes five terabytes of data per day. The company offers fast, scalable and reliable access to space at a fraction of the cost and time. Revenue for the company is expected to grow at a compounded annual growth rate of 100% from fiscal 2020 to fiscal 2025.

vii) BlackSky uses artificial intelligence and machine learning on its satellites for Earth observation. The company’s proprietary technology stack includes a constellation of high-resolution small satellites that monitor global events and activities. The company aims to set up a constellation of 30 high resolution multi-spectral satellites capable of monitoring locations on Earth every 30 minutes.

viii) Velo3D is core space adaptive manufacturing company and its 3D printing helps create engines and other components for SpaceX rockets. The company sells its printers using two methods: Companies can buy the custom 3D printers and license the design software, or they can pay for the printers and software in a single bundled service.

ix) Redwire Space offers business in on-orbit servicing, low earth orbit commercialization, digitally engineered spacecraft, space domain awareness and advanced sensors and components. The company has commercial and national security customers, with a contracted backlog of $150 million. Redwire Space sees revenue growing at a compounded annual growth rate of 72% from 2021 to 2025

… In India, Launch rockets and satellite companies have raised their initial venture rounds. Rocket launch companies — Agnikul and Skyroot have both raised $11M rounds. Pixxel is one satellite company which raised $7M from marquee investors …

What role will the government and public Space agencies like ISRO play in India’s Space landscape?

ISRO has established India’s credibility in the global space market. ISRO is solely responsible for the development of India’s spacetech ecosystem. They have had more than 200 successful missions since their inception with Launch Vehicles being their most prominent achievements

ISRO has also aligned the organization to support private space startups by creating two new entities — New Space India Limited and InSpace. IN–SPACe will act as a link between the Indian Space Research Organisation (ISRO) and private sector companies, assessing “how best to utilise India’s space resources and increase space-based activities.” New Space India Limited (NSIL) is ISRO’s commercial space arm to manufacture smallsats and CubeSats. These organizations will work with private companies in developing India’s commercial space capabilities. ISRO has also allowed private entities to start development of launch sites and spaceports. Currently, the Satish Dhawan Space Centre at Sriharikota is the country’s only spaceport operated by the Indian Space Research Organisation. Another spaceport is under development at Tamil Nadu’s Toothukudi …