Union Cabinet approves Rs. 1,000 cr VC fund for space start-ups

The Union Cabinet approved a Rs. 1,000 crore venture capital fund under the IN-SPACe program to support space-sector focused startups in India. The fund aims to strengthen India’s space economy, generate jobs, and drive innovation, aligning with national objectives for technological progress and economic development. The average investment is expected to be Rs 150-250 crore per year, based on the investment opportunities and fund requirements.

 

The Indian Government has approved a Rs1,000 crore venture capital (VC) fund to support space startups through IN-SPACe, an autonomous agency under the Department of Space (DOS). The fund will be deployed over five years, starting in FY26, with an initial allocation of Rs150 crore, followed by Rs250 crore per year in FY27-FY29, and Rs100 crore in FY30. The average annual investment is projected to range between Rs150-250 crore based on investment needs.

The fund will provide investments between Rs10-60 crore per startup, depending on the company’s stage and growth potential. Early-growth startups will receive Rs10-30 crore, while late-growth startups may secure Rs30-60 crore. The initiative aims to create hundreds of direct jobs in fields like engineering, software development, and manufacturing, alongside thousands of indirect jobs in logistics, supply chains, and professional services.

This move is part of India’s broader space sector reforms initiated in 2020, which included the establishment of IN-SPACe to facilitate private sector involvement in space. The VC fund aims to boost India’s space economy, currently valued at US$8.4 billion, and projected to grow to US$44 billion by 2033. Indian space startups secured US$126 million in funding in 2023, a 7% increase from the previous year.

The Cabinet stated, “With nearly 250 space startups emerging across the value chain, timely financial support is crucial to ensure their growth and prevent talent loss overseas,” It highlighted that the fund will serve as an Alternative Investment Fund under SEBI regulations.