Union Cabinet gives nod to Rs 1,000 crore VC fund for space startups

The Union Cabinet, chaired by Prime Minister Narendra Modi, on Thursday approved the establishment of a venture capital (VC) fund of Rs 1,000 crore for space-focused startups, with the average deployment of Rs 150-250 crore per year depending on investment opportunities and fund requirements. The fund will be set up under the aegis of the Indian National Space Promotion and Authorisation Centre (IN-SPACe), which functions as an autonomous agency under the Department of Space (DOS) to enable and facilitate the participation of private players in space-related activities.

The fund will be deployed over five years starting from the actual date of commencing operations, according to an official statement.

The fund will have an indicative range of investment is proposed to be Rs 10-60 crore, contingent upon the stage of the company, its growth trajectory, and its potential impact on national space capabilities.

According to the statement, the fund will invest in the following indicative ranges:

• Growth Stage: Rs 10 crore-Rs 30 crore
• Late Growth Stage: Rs 30 crore-Rs 60 crore

The fund, to be strategically designed to advance India's space sector, aims to strategically position the country as one of the leading space economies around the globe.

As part of its 2020 space sector reforms, the Government of India established IN-SPACe to promote and oversee private sector participation in space activities.

The fund aims to address the critical need for risk capital, as traditional lenders are hesitant to fund startups in this high-tech sector.

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