Whitespaces in Space Tech

Welcome back to Consortium.

As part of my ongoing interest in the Indian venture capital ecosystem, I wanted to start a new series where I write small investment theses that cover various sectors I am interested in and why they seem like viable investment opportunities for venture capital funds in the country and potentially limited partners abroad. I am terming this series “Whitespaces”.

This edition is going to breakdown the history of how space technology has grown globally, what India’s role is within this sector alongside where the market is expected to reach, and what layers of opportunity exist for new founders and investors that are looking to enter. A big shoutout to IIMA Ventures for informing a lot of the thinking in this piece.

Happy reading!

Previous editions of this series include: Wealth Tech

Background

In November 2025 ~800 flights were disrupted in Delhi over the course of 7 days. Multiple pilots reported GPS errors such as wrong position fixes, altitude discrepancies, and false ground proximity alerts. However, investigations quickly eliminated usual suspects such as air traffic control failure or weather. In reality, it was an act of GPS spoofing that resulted in this havoc.

In the last two years alone, the Directorate General of Civil Aviation has recorded almost 2000 incidents at major Indian airports. The United Kingdom’s government made an estimate that if such a 7 day GNSS disruption were to take place, it would set the country back £7.6 billion.

Unfortunately, India currently has no credible alternative to the GPS system for civil aviation. NavIC is India’s own navigation system but has only 3 of 11 satellites in constant operation. This means that every Indian flight is finding itself in airspace based on a foreign signal that is open, unencrypted, and unauthenticated.

As India’s space sector starts to mature, this story is one of many that highlights some of the emerging sub-sectors within the larger Indian space-tech market that founders can look to expand, and investors can look to back.

Why Now?

From Sputnik in 1957 to 2015, the number of objects that were launched into space each year were essentially flat. For the most part, space programs were government funded to position for strategic prestige and scientific progression. Beyond this, the economics of such expeditions were shaky as technology had not advanced enough.

SpaceX’s inception was a watershed moment for this sector as the introduction of re-usable rockets changed the landscape forever. Between 2016 and 2025, the number of objects launched annually increased 19x. This was primarily driven by the 99.7% cost reduction that took place over the course of five decades — $1.8 billion in the Apollo era to the $6.5 million Falcon 9 today. What once required an entire space agency and billions in sovereign capital is now achievable by a single well-funded private player.

What has led to this enormous reduction in costs is satellite internet. About 80% of all things launched by SpaceX have their own Starlink constellation. That rapid movement from government-funded exploration to commercial utilisation is the structural movement that matters — the privatisation of space.

Around a decade ago, the global space economy was over $300 billion with government budgets accounting for a majority of this. In 8 years, this value has grown almost 2x to over $600 billion with the tables turned as 80% of this is now covered by commercial activity. This has fundamentally moved space from a “program” to a sector.

Where is India?

Within the growing ~$600 billion space sector, India captures ~1.5% or around 8.5 billion as of 2022. Given that India houses one of the most cost-efficient space programs and has a proven vehicle in the PSLV, is the first country to land on the Moon’s South Pole, and a phenomenal talent base in the hard sciences, this number should be considerably larger.

The Indian Space Policy 2023 has been the unlock for this market to expand. Prior to this, the private sector within the space industry has been considerably limited to just being vendors and suppliers to ISRO. With the new policy, non-government entities have now been able to participate in the entire value chain from building satellites to collecting and analysing space data. Further strengthening this is IN-SPACe — an independent regulatory authority that now gives private startups access to ISRO infra, testing facilities, and launch support. As of early last year, more than 1,200 companies and 6,400 users have registered on the platform.

The result of these major changes have been tangible — India went from a handful of private space startups in 2019 to more than 300 companies by the end of 2025. These are all firms that are involved in the entire value chain — launch vehicles, satellite platforms, Earth observation, space awareness, propulsion, and analytics. To back these companies over $600 million in private invest\ments have been secured with 2025 alone crossing ~$94 million.

Additionally, the government has setup a dedicated ₹1000 Cr. venture fund over the course of 5 years to support the space sector, 100% FDI approval under the automatic route in satellite manufacturing, upto 74% in satellite services, and upto 49% for launch vehicles and associated systems. This marks a significant shift towards liberalising a sector that has historically been dominated by government approval for any foreign investment. Moving at this pace, the $44 billion share target that is set for 2033 is achievable however this will not be achieved by building more rockets.

Where Should Founders Focus?

Currently, the Indian space sector can be segmented into three parts and understanding which area to enter is arguably the most important strategic question any founder should be able to answer clearly.

Upstream is the segment that covers all products and services that are required to design, build, test, and launch objects into space. As of today, India has poured a significant amount of its energy into building this sub-sector. An example of this is how over 70% of ISRO’s active patents are on launch vehicle innovations and ~65% of all the private money raised by Indian space tech startups has gone to upstream companies. Although the opportunity is large, the structural challenges are real. Within the Upstream segment, India is a net importer as over 50% of essential components including solar cells, advanced alloys, and rare earth materials are imported from abroad. Aside from the geopolitical risks attached to this reliance, the lead time for these imports are between 14-16 months.

A more pertinent issue is that the Upstream market is already home to a formidable incumbent — Skyroot Aerospace. Recently, the company became the first space tech unicorn after closing a $60 million Series C round, valuing the company at $1.1 billion in May 2026. A landmark milestone for both the sector and nation as a whole, this is also a strong commentary on just how capital intensive this segment is. Over almost a decade, Skyroot has raised $160 million, all of which is targeted towards a product that is yet to see its premier orbital launch. Such is the nature of this category, giving founders a fair warning that the clock on an Upstream company is measured in decades and SpaceX will not vacate anytime soon.

Midstream is the segment that covers all products and services that are needed to keep satellites operational in space. Currently, this is the most underinvested layer but holds strong near-term business logic.

Today, the Lower Earth Orbit (LEO) is incredibly congested. More than 85% of all tracked objects in space are within this region and almost 75% of these objects are debris. To provide an estimate of just how crowded it is, today, over 10,000 satellites perform ~900 collision avoidance manoeuvres in a single day. Each movement that is carried out to dodge debris shortens a satellite’s operational lifespan. Naturally, the shorter the satellite’s lifespan, the less revenue it generates from the capital intensive infrastructure that put it in space in the first place.

Bangalore based space surveillance company Digantara is the clearest point of proof. In late 2025, the company raised $50 million for its Series B round to launch the first space surveillance satellite SCOT in January 2026. Thanks to this success, the company has been selected as a winning bidder for government defence tenders in India, with signed contracts with the US Space Command to serve analytics as a service alongside the US Missile Defense Agency’s SHIELD contract vehicle. In just two years the company has also grown its top line more than 10x and is targeting a $25 million to $30 million revenue figure over the next 18 months. Digantara’s growth is the perfect example of how midstream companies that are looking to solve commercial and defence problems have the opportunity to compress the time to revenue meaningfully.

Finally, Downstream is where the real money lies and where Indian startups are the least represented relative to the size this opportunity presents. Only ~$200 million of the ~$650 million raised in Indian space tech has been invested into downstream applications despite this segment accounting for close to 80% of the projected $44 billion market size in 2033.

Breaking Down the Downstream

The Downstream segment can be further sub-categorised into three parts —

1. Earth Observation — Growing at almost 30% CAGR and is projected to reach $8 billion in India by 2033. The core idea is that raw satellite imagery can be imagined as a commodity. The true value exists in the intelligence layer on top of it. Pixxel is the most advanced example of what such a company can look like at scale. In 2025, the company completed its first commercial satellite constellation of 6 Firefly satellites in partnership with Alphabet, Google, and Lightspeed. Alongside government bodies such as the Indian agricultural ministry, the company also serves British Petroleum, NASA, and Rio Tinto. Furthermore, the US National Reconnaissance Office has awarded the company a 5 year contract under a commercial hyper-spectral capabilities program.
   
   Rather than selling the raw imagery itself, Pixxel has built the Aurora platform — decision-grade analytics from hyper-spectral data across more than 130 bands. The critical nuance here is resolution requirement. A standard 10m resolution image creates only a 3% margin of error when analysing an American industrial farm of 500 acres. However, the same resolution creates a 30% margin of error when estimating the size of a 5 acre farm plot in India. It is this large error rate that makes crop insurance payouts unreliable and makes the intelligent product fundamentally unviable. The key focus for EO startups in India is to built sub-metre resolution and design for use cases that are specific to the Indian landscape.
   

2. Navigation and Positioning — The GPS spoofing story as a market thesis is where this segment lies. The Indian Chief of Defence Staff has made it explicitly clear that India cannot depend on foreign constellations for positioning, navigation, and timing requirements. In line with this, the government recently placed a fast-tracked order for 52 dedicated surveillance satellites under the Space-Based Surveillance III programme — an ₹27,000 Cr. initiative.
   
   Despite the existence of NavIC, its limitations are what create an urgency for startups that are building resilient and authenticated positioning capabilities using LEO-based approaches as an alternative or mission-critical applications. However, building another fleet tracking or location-based SaaS is not the solution that this market is looking for. Genuine aviation anti-spoofing and UAV navigation stacks are where the willingness to pay is high and the current competitive landscape is thin.
   

3. Satellite Communication — Perhaps the clearest commercial opportunity and one where India makes the most compelling case. Over 400 million Indians remain unconnected by current broadband capabilities. The North East of India represents the most concentrated version of this due to its high population density, mountainous terrain that hurts fibre network economics, and state governments teaming with urgency and large budgets to attain satellite connectivity at scale.
   
   With Starlink creating partnerships with Airtel and Jio, strong institutional credibility has been brought to the sector. However, with Starlink’s global pricing at $120 per month or ~₹11,000, this infrastructure becomes largely inaccessible to the Indian masses. The solution is an India-focused satellite communication company that delivers reliable connectivity at ₹500-600 per month, that is bundled with UPI, insurance, and local e-commerce services — something that Starlink cannot build with profitability in this market.

The GTM Logic

Start downstream. Downstream has the potential to generate cash flow faster, requires significantly lower capital infusion relative to the other two segments, and creates inroads into commercial partnerships that in the future justify upstream investment. For example, Pixxel started with data, built a strong customer base, and is now raising against its revenue base.

Pick a specific problem and go layers deep into finding a solution. Companies that have succeeded have focused on single issues — hyper-spectral imaging (Pixxel), agriculture intelligence (SatSure), and space situational awareness (Digantara).

For EO companies in particular, engaging with hedge funds earlier rather than later when drumming up a customer base in the global market is the most under-discussed path. Hedge funds use satellite data for commodity trading, supply chain monitoring, and macroeconomic signals. These funds tend to have deep pockets and validate data quality faster than other customer segments. Additionally, their pay cycles are more predictable and heavier relative to governmental and agricultural clients.

As an Upstream or Midstream founder, the priority must lie in defence customers who can pay a premium that covers the base R&D costs as the commercial market shapes itself. For example, India’s military has signed contracts with several private sector companies and is actively looking for additional deals. The ₹27,000 Cr. programme and the $3 billion planned military space spend are examples of future procurement channels that de-risk the lumpy revenue and cash flow projections that companies in these segments suffer from.

Finally, building what SpaceX will build is not ideal. The opportunity is to build what SpaceX has no incentive to build — hyper-local India specific applications for Indian agriculture, anti-spoofing infrastructure for Indian civil aviation, satellite communication for the ₹600/month North East India market.

Conclusions

The GPS spoofing incident in Delhi was a market failure more than a technological deficit — the lack of a commercially viable domestic alternative to a foreign signal that was never secure by design. However, the fact that India has been spending close to $500 million annually on foreign satellite transponders and has generated close to $150 million from ten years of commercial launches is also not just a technological problem. This is more a market structure problem where the talent, infrastructure, and policy frameworks have opened up but the layer where companies sit in the decision loop deeply enough to access their customers is what is missing. The farmer who will benefit from fair crop insurance, the pilot who can smoothly navigate their airplane in the wake of a crisis, or a coast guard who is tracking illegal fishing — these are where space tech startups need to be embedded such that their data and platforms create true value and are indispensable.

From 2019 to 2025, India has seen an explosion in the number of space tech startups. Skyroot is now a unicorn, Pixxel is selling to NASA, and Digantara has contracted with the US Space Command. The first generation of builders have proven that Indian space tech companies can compete. It is now the responsibility of the second generation to determine whether this can truly compound.