SIDBI To Manage INR 1K Cr Spacetech Fund: IN-SPACe

SIDBI Venture Capital has been selected as the fund manager for the INR 1,000 Cr venture capital fund announced by the government to back homegrown spacetech startups.

The Indian National Space Promotion and Authorisation Centre (IN-SPACe) made the announcement today.

“SIDBI Venture Capital Limited is selected as the fund manager/investment manager for the INR 1,000 Cr venture capital fund for the Indian space sector,” the regulator said in a statement.

It must be noted that the union cabinet approved setting up a INR 1,000 VC fund last October to give a push to the space economy. The fund was first announced by finance minister Nirmala Sitharaman in her Budget 2024 speech.

The initiative aligns with the Centre’s ambitious plan of taking the Indian space economy to a $44 Bn market potential by 2033 from $8.4 Bn in 2022. The government also aims to expand India’s share in the global space economy to 8-10% by 2040.

IN-SPACe chairman Pawan Goenka told Inc42 last year that the fund would become operational by the first quarter of the fiscal year 2025-26 (Q1 FY26). He then said that the fund will invest in about 35 startups with average ticket size ranging from INR 30 Cr to INR 40 Cr. 

The fund will also be open to contributions from other investors, and depending on the private capital inflow, the investment will be capped at INR 60 Cr.

The investment will made over the next five years, with plans to deploy INR 150 Cr in FY25, INR 250 Cr each in the next three fiscal years and INR 100 Cr in FY30.

Over the past few years, the Centre has taken a number of initiatives to boost the spacetech sector, including opening up the space for private players and liberalising the FDI regime. This has given rise to a new generation of startups that are driving innovation and technological advancements in the spacetech sector such as Agnikul, Dhruva Space, Digantara and Pixxel to name a few.

Last month, IN-SPACe also floated a INR 500 Cr Technology Adoption Fund to support spacetech startups with funding up to INR 25 Cr per project.

The fund will cover 60% of project costs for startups/MSMEs and 40% for larger industries, focusing on satellite technology, propulsion systems and ground station infrastructure.

While total startup funding raised by Indian startups jumped 20% to $12 Bn in 2024 from $10 Bn in the year prior, spacetech startups saw a 35% year-on-year decline in funding to $81 Mn last year. This was despite the number of deals in the sector rising to 14 during the year under review from 11 in 2023.