India's deep technology ecosystem has shown significant progress in recent years. Thanks to the development of strong software capabilities and investments in research and development, startups have begun transitioning from creating prototypes to pilot production, equipment implementation, and government procurement.
According to the Zinnov-Nasscom Startup Report 2025, many startups have successfully passed the technical validation stage. However, a more serious challenge now lies ahead of them.
The report indicates that the biggest problem in India's deep technology sector remains the commercialization of validated technologies and scaling them into successful products. Many startups get stuck between the seed and Series A rounds, remaining in long pilot programs or being unable to move beyond early adoption.
Nevertheless, one sector has managed to avoid this trend. Indian space startups have scaled hardware more successfully compared to many of their peers in the deep technology sphere. This raises the question of why space technology is different, and what lessons other industries can learn from this sector?
One distinguishing factor of space startups is their global outlook. Since the establishment of IN-SPACe (Indian National Centre for Promotion and Authorization of Space Activities) in 2020, India's private space technology ecosystem has started creating products for international markets, opening up opportunities unavailable to many deep technology sectors focused solely on the domestic market.
Moin SPM, co-founder and COO of Agnikul Cosmos, emphasizes: 'Space is a global business, so we never created a product just for one market. This defined our approach to reliability and commercial terms from the very beginning.' He adds that their first clients were in Europe and the US, which forced the company to comply with international standards from day one, rather than trying to achieve them later.
Ranendu Ghosh, co-founder and CTO of SatLeo Labs, agrees with this view. He notes that the focus on international markets has helped Indian space technology companies overcome the limitations of domestic demand while testing their technologies against global standards.
Moin also links Agnikul's growth to the support of organizations like ISRO and IN-SPACe. He says that close collaboration within a shared regulatory environment has helped transform technical ambitions into approved missions.
CVS Kiran, co-founder and CEO of Red Balloon Aerospace, believes that another advantage is that Indian space startups did not have to build an ecosystem from scratch. He states: 'When an Indian space startup needs a qualified supplier for processing, composites, avionics, or environmental testing, such an ecosystem already exists.'
Kiran explains that ISRO spent six decades building this base. Thousands of small and medium suppliers across the country learned to manufacture military-grade equipment for government programs long before any of them prepared a presentation. He contrasts this with the semiconductor industry, which lacked such a legacy.
Comparing the situation to semiconductors, Kiran, former Vice President of Skyroot Aerospace, notes that aerospace and space equipment represents 'low-volume, high-value engineering,' which is the opposite of chip factory work.
He also points out another advantage: space startups received something often lacking in semiconductor and robotics ventures—a government that regulates, advises, and acts as the primary customer. In his words, when defense and disaster response agencies are ready to purchase Indian technologies, hardware companies can scale based on real orders, not forecasts.
Ghosh, who worked as a scientist at ISRO for 26 years, believes that the relationship between the private and public sectors will evolve, not disappear. He states that as space startups grow, dependence on ISRO will decrease not only in rocket technology but also in other areas, yet ISRO will continue to play a mentoring role due to its extensive experience.
For Moin, one of Agnikul's main advantages was the development of critical capabilities within the company, allowing it to move faster and reduce reliance on external supply chains.
Harish Chandrasekar, co-founder and CEO of AGNIT Semiconductors, believes that the industry benefited from earlier political support stimulating private participation. Nevertheless, he thinks this model can offer lessons for the semiconductor industry. He argues that the structured approach of space technology can be replicated for semiconductors, especially regarding the government acting as the initial customer and providing long-term contracts for strategically important use cases.
AGNIT Semiconductors is engaged in the development and manufacturing of gallium nitride-based semiconductors as an alternative to traditional silicon technologies.
Despite the successes, India's space technology sector still has a path to travel to catch up with global leaders. Venkat Atmanathan, a senior researcher studying high-speed movement systems in the US, believes the next task for the industry is scaling equipment to operate at much higher flow rates, chamber pressures, and temperatures.
He explains that most companies today create what is possible with current manufacturing technologies. To achieve parity with the most advanced launch providers in the US and Europe, India could also benefit from carefully structured technology transfer, similar to what accelerated progress during the Vikas engine program.
Atmanathan praises Indian startups for their early focus on global markets but points out that launch services present a different challenge. He notes that many countries reserve a significant portion of their launch contracts for domestic providers, especially for national security and defense tasks. He believes relying solely on international commercial clients may not be enough in the long run. A stronger market in Asia and the Middle East would help diversify opportunities for Indian launch providers.
He also believes that Indian companies should more openly compare their equipment with global standards. Public discussions often focus on successful demonstrations, but far less attention is paid to performance metrics that allow for meaningful comparisons. Atmanathan cites rocket engine chamber pressure as an example. He says: 'Many modern high-performance liquid rocket engines operate in the range of approximately 60 to over 100 bar, whereas Agnikul publicly discussed the operation of Agnilet at around 10 bar. This comparison is not intended for direct matching, as each engine is designed with different goals and constraints.'
He continues: 'Rather, it illustrates what further path needs to be traveled before reaching the performance range of the most advanced launch systems. This does not diminish Agnikul's achievements. The creation and successful launch of a liquid rocket engine is a significant engineering achievement in itself.' He concludes that publishing more quantitative performance data and comparing it with international performance metrics would help the industry objectively measure progress and determine where future improvements are needed.
According to Tracxn, Indian space technology startups involved in developing launch vehicles, satellite manufacturing, propulsion systems, space situational awareness systems, Earth observation, and low-level analytics have attracted approximately $871 million. These funds were raised across 241 funding rounds involving 285 companies as of July 2026.
This figure demonstrates rapid industry growth compared to 2021, when the total amount raised was only $43 million across 12 rounds. Over sixty percent of the capital raised was directed into ten most funded startups, led by Skyroot Aerospace, which secured $150 million.
The development of India's private space sector has been stimulated by policy reforms that have facilitated investment attraction and allowed the country to create its first space technology unicorn and develop its own launch vehicle privately.
On July 18, 2026, Skyroot's Vikram-1 rocket reached low Earth orbit at an altitude of 450 kilometers, successfully deploying four payloads. These included demonstration technologies from Grahaa Space, Cosmoserve, DCubed, and Skyroot's own SCOPE satellite. This achievement made India the third country, after the USA and China, capable of privately developing orbital launch vehicles.
This launch highlights the pace of development across the entire ecosystem: India conducted its first private orbital launch six years after opening the sector to private participation in 2020. Skyroot plans another test flight at the end of 2026 before commencing commercial launches in 2027.
Funding has significantly increased: from $43 million in 12 rounds in 2021 to a record $200 million in 53 rounds in 2025, with funding in 2026 maintaining strong momentum as of now. Five companies—Skyroot Aerospace ($50 million Series C), Digantara ($50 million Series B), EtherealX ($21 million Series A), Bellatrix Aerospace ($20 million Series A), and AgniKul Cosmos ($17 million Series C)—collectively contributed $158 million, exceeding half of the capital raised in 2025 and 2026.
Seed funding volume increased from $7 million in 2022 to $62 million in 2025. Furthermore, late-stage rounds appeared for the first time, reaching $17 million in 2025 and $53 million as of now in 2026. Investors have expanded their base to include not only domestic venture capital funds and business angels but also sovereign wealth funds and global institutional investors.
The ten leading companies by funding volume have collectively attracted over $548 million. The leader is Skyroot Aerospace with $150 million. Significant amounts have also been raised by Pixxel ($96 million), AgniKul Cosmos ($76 million), Digantara ($67 million), and Bellatrix Aerospace ($34 million). Skyroot became India's first space technology unicorn after a $50 million Series C round in May 2026, while Pixxel, AgniKul Cosmos, and Digantara have also attracted substantial funding.
Bengaluru leads with $495 million raised across 106 rounds. Hyderabad follows with $205 million, and Chennai with $80 million. These three cities together account for the majority of equity financing gathered by the Indian private space technology ecosystem.
