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In the year When it launched its first rocket in 1963, India was a poor country with the world’s most advanced technology. That projectile, the nose cone cycling to the launch pad, placed a small payload 124 miles above the ground. There was little to pretend that India would go with the United States and the Soviet Union.
In today’s space race, India has got a lot of sure footing.
In a sleek, spacious rocket hanger an hour south of Hyderabad, India’s hub for tech startups, a group of young engineers floated aboard a small experimental cryogenic thruster engine. The two founders of Skyroot Aerospace, speaking amid puffs of steam, explained their excitement at seeing a rocket of their own design launch India’s first private satellite plane last November. These new thrusters will propel Skyroot’s next, more valuable payload into orbit this year.
Suddenly, India is home to at least 140 registered space technology startups, a local area of research that has the potential to transform the planet’s connectivity into the final frontier. It is one of the most sought-after sectors in India for venture capital investors. The startup’s growth has been explosive, jumping from five when the outbreak began. And they see a huge market to serve. Pawan Kumar Chandana, the 32-year-old CEO of Skyroot, estimates that they want to send 30,000 satellites into space this decade.
India’s importance as a scientific power is taking center stage. When President Biden hosted Prime Minister Narendra Modi in Washington last month, a White House statement said the two leaders “called for enhanced commercial cooperation between the US and Indian private sectors across the entire space economy value chain.” Both countries see India as a platform to emerge as a counterweight to their mutual rival, China.
In its first three decades, the Indian Space Research Organization, or ISRO, made the country proud: India’s first satellite image was featured on a two-rupee note in 1995. Then, for a while, India did not pay attention to its space ambitions, which focused on young researchers in information technology and pharmaceutical developments. Now, India is not only the world’s most populous country, but also the fastest growing economy and a thriving innovation hub.
The business of space has also changed. Driven by private enterprise rather than massive government budgets, space technology is meeting small-scale commercial objectives. Imaging systems relay information about the planet back to Earth, helping Indian farmers monitor their crops or catch commercial fishing vessels. Satellites bring phone signals to the farthest corners of the country and help build solar farms far from India’s megacities.
Since June 2020, when Mr. Modi announced a push to boost the space sector, opening it up to all types of private enterprise, India has launched a network of businesses, each with original research and home-grown talent. Last year, space startups secured $120 million in new investments, doubling or tripling each year.
ISRO, also known as ISS-Ro, shares a profitable legacy with them, as it makes room for new private players. The spaceport, on the island of Sriharikota, is located near the equator and is suitable for launching to various levels of orbit. The government agency’s “workhorse” rocket is one of the most reliable for heavy payloads. With a success rate of nearly 95 percent, it has halved the cost of satellite insurance – making India one of the most competitive in the world.
And there’s money in launching equipment into space: that market is worth about $6 billion this year and could triple in value by 2025.
In Hyderabad, the work space occupied by Dhruva Space, which deploys satellites and is India’s first space launch, is filled with dummy satellites, atmosphere-controlled clean rooms and an artificial-gravity test facility. In any given month, Kranti Chand, the head of strategy, spends about a week in Europe and another in the United States, so he is rarely available to meet with clients and investors.
It is Elon Musk who has stolen India’s – and the world’s – thunder in the space business. His company SpaceX and its relaunchable rockets have reduced the cost of sending heavy objects into orbit, so India cannot compete. Even today, at $6,500 per kilogram from American spaceports, SpaceX production is the cheapest anywhere.
India has plenty of affordable engineers, but their low salaries alone cannot beat the competition. This allows an Indian company like Skyroot to focus on more specialized services.
“We are like a taxi,” says Mr Chandana. His company charges higher fees for low-cost launches, but SpaceX is “like a bus or a train, taking all the passengers to one destination,” he said.
SpaceX launched India’s launch forces into space. By the time Mr. Modi took priority, some of ISRO’s own engineers were getting into the game, including Skyroot’s Mr. Chandana and partner Bharat Dhaka, 33.
One of India’s advantages is geopolitical. Two countries that have long offered low-cost options for startups are Russia and China. But the war in Ukraine ended Russia’s role as a rival. British satellite startup OneWeb took a $230 million hit in September after Russia seized 36 of its spacecraft. Next, OneWeb turned to India’s ISRO to send its next constellation of satellites into orbit. Likewise, the US government is more likely to accept any US company sending military-grade technology through India than China.
The Indian seller ecosystem is quite impressive in size. Decades of business with ISRO have spawned nearly 400 private companies in Bengaluru, Hyderabad, Pune and elsewhere, each specialized in making special screws, gaskets and other space-friendly products. A hundred may cooperate on one launch.
Skyroot and Dhruva operate in the relatively niche launch and satellite supply sector, but these together account for just 8 percent of India’s space business pie. A much larger chunk comes from companies involved in gathering satellite data.
Pixxel is a popular startup in that area. He developed an imaging system to detect patterns on the ground that are outside the range of ordinary color vision. It has its headquarters in Bengaluru and an office in Los Angeles – and also has a contract with a secret agency in the Pentagon. Even large parts of the satellite business will inevitably move from low-orbit to consumer broadband and TV services.
Inside Skyroot’s hangar, the engineers-turned-entrepreneurs, educated at the first Indian Institutes of Technology and gaining experience working at ISRO, speak the language of venture-capital funding. After the “seed round,” Mr. Chandana said, “next is Series A, which was around 11 million, and then there’s a bridge round of 4.5 million.”
His company was valued at $68 million after four rounds. But they have no plans to cash out anytime soon. None of them were more interested in science than in business. Running a company, Mr. Chandana says, is “common sense.”
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