🚀 Space Technology in India 🛰️
Discover more from The Indian Dream
🚀 Space Technology in India 🛰️
Private players enter the Indian Space Race
In this article, we look at the trends around Private Space Technology in India. The Indian Dream is a weekly newsletter that gives you latest Business Ideas, Opportunities and Trends direct to your inbox. Join 1,500+ other entrepreneurs looking for their next big business!
This week I get the pleasure of writing about my favorite subject - Private Space Technology in India.
Private space tech is still a nascent industry with lots of room for new players who want to enter in analytics, manufacturing, design or community building. Even SME players have a chance in entering the space industry as component manufacturers as the space looks to explode over the next decade.
Before we dive deep, let me give you a high level understanding of Space Tech. For years, government organizations have been sending satellites in space for various use cases ranging from Communication, Navigation, Television and Remote Imaging & Sensing. Organizations like NASA and ISRO have been doing this work. Over the last few years, private players have entered and new use cases have emerged. And in this newsletter we explore the current landscape and the opportunities.
Note: Space is a complicated topic but we’ve tried to keep it as simple as possible. For people who want an even deeper dive, check out the links at the bottom.
Why Now? What about ISRO?
ISRO (Indian Space Research Organization) has dominated the Indian Space Industry since its formation in the early 70’s. They pulled off many impressive missions on a low budget in this 50 year history - the Mangalyaan mission to Mars and the Chandrayaan programme to the Moon.
The graphic below shows the value chain that’s been created around ISRO’s requirements over the past 50 years. About 1/3rd of the value is captured in the upstream and 2/3rd in the downstream.
However, this private space industry in India should not be considered a major success for ISRO. Till date, private players were just subcontractors to ISRO. They manufactured goods as per ISRO specifications and the Intellectual Property (IP) always rested with ISRO & the Department of Space.
This means that the private Indian space industry could never grow through exports or others means and as a result, they controlled just 2-3% of the ~$360 billion global space industry.
This relationship between Private and Public players has been changing over the last few years. With private space players like SpaceX making a splash on the global scene, The Government of India recognised that they couldn’t keep the space industry in India tightly controlled anymore. They started loosening the reins.
March 2019: Union Budget announcement on the formation of New Space India Limited (NSIL) as the marketing arm of ISRO.
June 2020: Bill passed allowing private firms & startups to build satellites and rockets and also allowing them to offer space services to customers globally. All operational assets of ISRO were shifted to NSIL and the Indian National Space Promotion and Authorisation Centre (IN-SPACe) was announced as an industry regulator.
Private players now have a framework within which they could build and launch satellites in India.
🧐 Market Gap
Launches are currently handled exclusively by ISRO.
Globally, launches are being taken over by private players who are doing it cheaper than government agencies.
SpaceX is the most famous example of private companies taking over launches.
From the people we’ve spoken to - ISRO & Soyuz charge ~$20,000 - $25,000/kg while SpaceX charges only ~$5,000/kg of payload.
This huge difference in cost can allow smaller & newer players to launch their own satellites.
Shifting launches to private space tech players also allows ISRO to focus on more strategic programmes than worrying about launching the latest Tata Sky satellite.
India has Space Scientists with 60+ years of space mission experiences.
Coupled with lower labour costs in India - this is a deadly combination to disrupt global players.
Earth Observation data, which provides insights about crop yield, oil leaks, etc., is available at expensive rates from foreign sources or only in limited electro-magnetic bands.
This data is not only required by India but also other developing countries in South East Asia, Africa or Latin America.
Indian companies would be better suited to understand the problems & price points in other developing countries when compared to US, European or Japanese businesses.
💰 Market Size
Global market size of ~$360 billion and about ~$7 billion in India. However, more than 80% of global demand is still driven by governments or other public companies - this demand has been slwoly shifting to private players in recent years.
Here’s a fantastic podcast with a Space Economist about his views on the space industry - he questions all these hundreds of billions of dollars assigned to the size of the space industry and instead proposes a global market size of ~$100 - 200 billion.
The market for space technology can be largely broken down into 3 major segments:
Upsteam: Launch vehicles, satellites, etc.
Midstream: Data processing, data management, TV dishes, etc.
Downstream: Internet, satellite TV, GPS, etc. - majority of the revenue lies here.
Downstream applications are can be broadly classified into:
Communication - largest market of ~$130 billion globally
Earth Observation - fastest changing field as per our assessment.
Navigation - GPS, GLONASS, GALILEO
Fun Fact: Satellites manufactured in India and launched by Indian launch vehicles are subject to 18%* GST. Foreign satellites launching from India have no GST.
*Exact GST rate might be wrong.
🥊 Players
Public Sector
Indian Space Research Organisation
New Space India Limited
Indian National Space Promotion and Authorisation Centre (IN-SPACe)
Private Sector
Upstream
Launch Vehicles
Agnikul - $3.6 million funding, $11 Million in Series A
Skyroot - $4.2 million in Seed funding, $11 Million in Series A
Bellatrix Aerospace - $3 million funding
Satellite Manufacturing
Pixxel - building hyper spectral imaging satellites - $5.7 million funding
Dhruva - $0.7 million funding
TeamIndus - $18 million funding
I’m not sure if TeamIndus is still operating.
Downstream
Space-based Internet
Earth Observation
Kawa Space - $0.6 million funding
Blue Sky Analytics - $1.2 million funding
Skylo Technologies - $133 million funding
US based with Indian founders & a large base in Bangalore
Another fantastic podcast on the early days of Earth Observation work at ISRO.
Education & Advocacy
🙏 Our Predictions
More involvement of State Governments (instead of the central government) in space related activities and requesting data from ISRO & private space entities.
The data will mostly for Earth Observation to help states make better agricultural, natural disaster or other decisions.
For example, Kerela just announced SpacePark Kerala in Thiruvananthapuram to attract global space startups and become a manufacturing hub for space technology, applications and R&D.
Global investments in Space startups will skyrocket 🚀
2019 saw $5.7 billion of investments in Space startups globally but only a small fraction came to India.
As Indian space startups start maturing, more of this money could see its way to India.
Move towards smaller satellites and smaller launch vehicles will see more players entering in various parts of the space industry value stream.
Small satellites and launch vehicles are much cheaper and easier to iterate, thus lowering the entry barrier for new players. Dhruva Space understands this and is already focused on small sats.
The proliferation of small sats will also lead to a treasure trove of data being collected -> leading to new opportunities for data analytics.
Finding revenue and reaching profitability is going to be an up-hill struggle.
Globally, only a small percentage of the hundreds of space start-ups are showing any operating revenue and even fewer have reached profitability. Source
The Global space ecosystem is more matured than the Indian space ecosystem and thus Indian startups have a long road ahead of them.
🛒 Opportunities
Manufacture components for ISRO or other private players.
Given the complexity of the products and the field in general, this is the most practical opportunity for most people.
As the space industry explodes in the next few years, high quality component manufacturing for satellites or launch vehicles will become a cornerstone for the industry.
Start a dialogue between SME manufacturers and ISRO & other agencies to find new suppliers for the upcoming space boom in India. Try to get SME representation onto IN-SPACe.
Build Earth Observation datasets & analysis in India & sell to the world.
Africa, South East Asia & Latin America do not have any space programmes that can service their needs. However, these regions have the same demand for Earth Observation data.
Analyse the troves of open source Earth Observation data that are already being produced by satellites across the globe.
For example, can you find a better way to use data from NOAA?
Or build data analysis tools.
Raise a Space Fund to help fund startups in this space (pun intended).
If you noticed, none of the Indian space startups have raised more than $10 million to date (this changed the day we published this, with Skyroot and AgniKul both raising $11m Series A!) because of the high capital and high risk nature of this industry.
Can you raise money from HNI’s who are either:
Bullish on the industry, or
Enthusiastic about Space, or
Have a high risk appetite.
OR, work with the Government of India to raise this fund as public private partnership (PPP).
Build a community of Space Technology founders, employees, scientists & other space enthusiasts.
Help people find jobs, solve problems or just make connections.
Space Tech in India is still a small community of people - making your website or platform the hub for all Space Tech discussions in India could get rich dividends when the industry grows.
Narayan Prasad from New Space India told us that he already has a Slack Community of 1,000+ people.
Create a 6 or 12 or 24 week course using retired or active Space Scientists to help train post graduate engineers on space specific concepts.
In order to grow the Indian space ecosystem, there is a “(n)eed for improved outreach by the Indian space program, to create a highly skilled human resource pool and enable students, enthusiasts and professionals to be able to closely participate in and view the Indian space program.”
Indigenise imported sensor technology.
Build a network of ex-ISRO & international space scientists to help consult entrepreneurs who want to enter the industry.
“Create a knowledge repository covering the major aspects of space technologies for building satellites and subsystems, launch vehicles, ground segment equipment etc.”
🔗 Links
Main Trends & Challenges in the Space Sector - In-depth report about the global space industry that can give you a good understanding of the sector.
New ESPI Report: New Space in Asia - Another fantastic report to give you a quick primer on the Indian Space industry.
Preparing to scale new Heights: Enhancing private participation in India’s commercial space sector
Start-up Space: Update on Investment in Commercial Space Ventures