After his second or third trip back from Russia, he thought there must be a better way to solve his rocket problem. That was when he decided to start SpaceX in 2002 with just a handful of employees. He went on to create history with his twin achievements of re-launching a used rocket and salvaging the vehicle yet again, in his quest to slash launch costs and shorten intervals between space shots.
Can India too have its Elon Musk? The search has begun. Many decades ago, Indian space scientists used to carry rocket parts to the launch site on a bicycle. That iconic image from the sixties highlighted the gap between ambition and capacity. But India has narrowed that gap in a short time. It has landed its craft on the Moon as well as Mars and will soon send its astronauts in space. But it is now exploring a whole new orbit — small startups that come up with innovative solutions. That’s where India can find its own Elon Musk. Today, this parallel may sound as ironic as that iconic photo of rocket parts being carried on a bicycle.
Opening up the space sector
On April 6, the Union Cabinet approved Indian Space Policy 2023 which aims to encourage private investment in the space sector. The policy authorises Indian National Space Promotion and Authorisation Center (IN-SPACe), India’s space regulator, to act as the single-window agency for clearance of space activities by government entities as well as non-government entities.
The government actually opened up the space sector to private entities three years ago, but it has played a limited role so far. The new policy allows the private sector in every state of space programmes. “The single takeaway from the new policy is that nothing is off limits to the private sector. They can work on technologies, create infrastructure, develop launch vehicles, launch satellites with payloads for communication, navigation, earth observation (EO)… there is no constraint put on the private sector,” IN-SPACe Chairman Pawan Goenka told ET recently.
Since the space sector holds great strategic and security importance, any space activity must be authorised by IN-SPACe, whether it is government or private. While ensuring India’s strategic or security interests are not compromised, it will allow private entities across various categories and functions.
Startup founders have told Reuters that the new approach means approvals come easier, stakeholders are aligned with each other, and there are more private industry veterans in government helping the sector. Goenka himself is an auto-industry veteran, a former MD of Mahindra and Mahindra Limited and chairman of SsangYong Motor Company in Korea.
The promising beginning
The government unlocked the space sector for private participation in 2020, and since then India has made promising beginnings. The privatisation effort began with a late 2020 video conference call between Prime Minister Modi and industry executives, people involved in the process had told Reuters. Since then, Modi has made it clear he wants to sweep away red tape and create national champions, they say. “Modi is a technology person. So the suggestion is to hand over production and development to private players, while we look at technology. It then becomes a self-sustaining environment,” S. Somanath, chairman of ISRO, told Reuters.
Last year in November, ISRO launched the Vikram-S rocket from its spaceport in Sriharikota. It was no ordinary launch. Vikram-S was a look back as well as a look ahead — the name of the rocket was a tribute to the father of India’s space programme, Vikram Sarabhai, while the name of the mission, ‘Prarambh’, heralded a new beginning. It was India’s first private rocket, developed by four-year-old startup Skyroot Aerospace. Mission Prarambh marked the entry of the private sector into India’s space mission.
Skyroot Aerospace is the largest funded private space startup in India. It was founded in June 2018 by former ISRO scientists Pawan Kumar Chandana and Naga Bharath Daka.
Waiting for India’s first space unicorn
At present, India has more than 150 space startups. Eight to 10 of them now are well-known names that everybody talks about: Skyroot Aerospace, Agnikul Cosmos, Dhruv Space and Bellatrix Aerospace, etc. Pixxel, another young space startup, in March won a five-year contract from the US National Reconnaissance Office.
IN-SPACe has recently unveiled a state-of-the-art design lab in Ahmedabad to enable space sector start-ups to transform their innovative ideas into implementable models at a faster pace. Earlier, IN-SPACe had announced a Rs 1 crore seed fund scheme for early-stage space start-ups.
“Some of them have reached a point where they will start getting meaningful revenue. But it’s very early, I would say this year, half a dozen or so companies should get into serious revenue generation. First unicorn in the Space sector should emerge in about a year,” IN-SPACe Chairman Goenka had told ET.
However, a general funding winter for startups may not bode well for space startups either. Though demand for sending satellites into space remains strong, US rocket startups are taking drastic measures to survive a tight funding environment where fears have been exacerbated by the bankruptcy of Virgin Orbit, Reuters reported last month. As the cost of capital rises with the Federal Reserve’s interest rate hikes, investors are less incentivized to fund capital intensive projects that do not have a clear revenue stream or path to profitability, leaving many space startups scrambling for funds, Reuters reported.
But Goenka believes there will be a beeline of investors for space startups once India gets its first space unicorn.
“In 2019-20 there was a big jump. There was an increase in 2020 and 2021 as well. Four companies have investments of more than $10 million (in 2022 alone). I am waiting for the first unicorn. Once we have the first unicorn, there will be a beeline of investors waiting to invest in Indian space startups,” Goenka had told ET last year. Referring to Elon Musk’s SpaceX, he had said: “We will have to wait for some time. I cannot say when it will happen, but it will.”
Encouraged by high-profile successes elsewhere, India wants its private space companies to increase their share of the global launch market by fivefold within the next decade, an effort boosted by the personal support of PM Modi, according to Reuters. In the year after the country opened the way for private launches in 2020, the number of space startups more than doubled, from 21 to 47.
Investors poured $119 million into Indian space startups in 2022, up from a total of just $38 million in all the years up to 2017, Reuters reported. They see a less-costly alternative to European launchers that are grounded or under development, as well as access to a bustling manufacturing hub, analysts say. India’s space companies also hope to find new customers as sanctions and political tensions have cut off Russia from much of the international launch market.
Early-stage troubles won’t hold India’s space startups down for long. When Musk had started SpaceX, he wouldn’t let even his friends invest because he feared he would lose all the money and it better be his own.