India's space startups ignite investor
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[June 24, 2019]
By Sachin Ravikumar and Ismail Shakil
MUMBAI (Reuters) - From companies building
palm-sized satellites to those aiming to propel satellites into space
using cleaner fuels, a new wave of space technology startups are
mushrooming in India, catching the attention of investors keen to join
the space race.
Bengaluru-based Bellatrix Aerospace, which wants to propel satellites
into orbit using electric and non-toxic chemical thrusters, has raised
$3 million from a group of investors, co-founder Yashas Karanam told
Venture capital fund IDFC Parampara is leading Bellatrix's pre-Series A
round. The family office of Suman Kant Munjal, who belongs to the
billionaire family that controls Indian motorcycle maker Hero MotoCorp,
and Deepika Padukone, one of Bollywood's biggest stars, are two of the
other seven investors.
Meanwhile, Mumbai-based Kawa Space, which designs and operates earth
observation satellites, has closed a seed round of an undisclosed
amount, one of its investors, Vishesh Rajaram, managing partner at
Speciale Invest, told Reuters.
Bellatrix and Kawa are two of over a dozen Indian startups developing
satellites, rockets and related support systems which can power space
missions serving a range of industries.
Their fundraising represents a big leap in private space investments in
India, a leading space power but where the government has enjoyed a
near-monopoly for decades.
"No venture capital firm which does tech investments in India has
invested an amount of this size in space technology before," said
Narayan Prasad, co-founder of online space products marketplace
Satsearch, referring to Bellatrix's funding.
Besides Bellatrix and Kawa, seven space technology companies in India
are funded, according to startup data tracker Tracxn and interviews with
Space technology is red hot thanks partly to activity happening 2,000 km
(1,200 miles) above the earth in the low-earth orbit, much closer and
easier to reach than the geostationary orbit where many communications
Here, small and cheaper satellites are snapping images used in
everything from crop-monitoring and geology to defense and urban
planning, bringing down costs and increasing the frequency of images.
In the past five years, some two dozen Indian startups have grown into
unicorns - companies with over $1 billion valuations - most betting on
India's growing middle-class and the consumer boom at home.
India's space technology firms are part of a new breed of startups, and
investors are paying attention, given the surging global interest in
everything from space exploration to space vacations.
Satellite launches planned in the coming years worldwide give investors
confidence in such companies, said Bellatrix investor Jatin Desai, whose
Parampara Capital collaborated with lender IDFC to form IDFC Parampara.
"That gives us a large addressable potential market," Desai said.
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Bellatrix Aerospace CEO Rohan Ganapathy stands next to a vacuum
chamber at their laboratory in Bengaluru, India, June 22, 2019.
Picture taken on Juen 22, 2019. REUTERS/Ismail Shakil
Over 17,000 small satellites could be launched between 2018 and
2030, consulting firm Frost & Sullivan estimates.
"There is money to be made ... These are exciting times for lots of
entrepreneurs," said Rajaram, whose Speciale Invest has bet on three
space startups in India.
LONG GESTATION PERIOD
To be sure, investors aren't opening the coffers for India's space
startups in large numbers just yet.
Indian venture capital firms Maple Capital, Ideaspring Capital,
Bharat Innovation Fund and 3one4 Capital, say they have held talks
with space startups but are taking a wait-and-watch approach.
"The gestation period is long by the time you see returns," said
Naganand Doraswamy, managing partner at Ideaspring, referring to the
multiple stages of development, testing and government approvals
involved in space missions.
The state-run Indian Space Research Organization (ISRO), currently
preparing for its second lunar mission, has a monopoly on launching
rockets in India.
Still, Indian firms are free to use ISRO's rockets or overseas
launch services such as Elon Musk's SpaceX or New Zealand and Los
Angeles-based Rocket Lab to send satellites to space.
Most Indian space startups are hopeful that parliament will pass a
long-pending space law, which will give clarity on how private
companies can operate in the sector.
The administration of Prime Minister Narendra Modi has sought
suggestions from stakeholders for a draft Space Activities Bill,
which it has said could "possibly" be introduced in parliament this
Bellatrix Aerospace's first customer is ISRO, which is also
mentoring the company as it readies a water-based propellant to help
maneuver satellites in space.
Bellatrix is not the only company racing to develop newer satellite
propulsion systems, with at least three others overseas reportedly
working on similar products.
The company says its systems are affordable, less toxic and much
lighter, providing more room for payload on satellites. "This will
be the future," co-founder Karanam said.
(Reporting by Sachin Ravikumar and Ismail Shakil in Mumbai; Editing
by Euan Rocha and Lincoln Feast.)
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