New Delhi: The Union Cabinet today approved setting up a Rs.1000 crore Venture Capital Fund dedicated to the space sector under the aegis of IN-SPACe – established as part of the Government’s 2020 space sector reforms to promote and oversee private sector participation in space activities.
The proposed fund is expected to boost employment in the Indian space sector by supporting startups across the entire space supply chain—upstream, midstream, and downstream. It will help businesses scale, invest in research and development, and expand their workforce.
Each investment could generate “hundreds of direct jobs” in fields like engineering, software development, data analysis and manufacturing, along with “thousands” of indirect jobs in supply chains, logistics, and professional services.
“By fostering a strong startup ecosystem, the fund will not only create jobs but also develop a skilled workforce, driving innovation and enhancing India’s global competitiveness in the space market,” according to a cabinet note.
The deployment period of the proposed Rs.1,000 crore VC fund is up to five years from the actual date of the start of the fund operations. The average deployment amount could be Rs.150-250 crore per year, which will depend on the investment opportunities and fund requirements.
The indicative range of investment is proposed to be Rs.10-Rs.60 crore, contingent upon the stage of the company, its growth trajectory, and its potential impact on national space capabilities. Indicative Equity Investment Range could be:
- Growth Stage: Rs.10 crore – Rs.30 crore
- Late Growth Stage: Rs.30 crore – Rs.60 crore
Based on the above-mentioned range of investment, the fund is expected to support approximately 40 startups.
The Fund is strategically designed to advance India’s space sector, aligning with national priorities and fostering innovation and economic growth through the following key initiatives:
- Capital Infusion: This can create a multiplier effect by attracting additional funding for later-stage development, thereby instilling confidence in private investors.
- Retention of space companies domiciled within India, and countering the trend of Indian companies domiciling abroad.
- Accelerate the private space industry’s growth to meet the goal of a five-fold expansion of the Indian Space Economy in the next ten years.
- Accelerating Space Technology Development
- Boosting Globa! Competitiveness
- Supporting Atmanirbhar Bharat
- Creating a Vibrant Innovation Ecosystem
- Driving Economic Growth and Job Creation
- Ensuring Long-Term Sustainability
By addressing these points, the fund aims to strategically position India as one of the leading space economies, the cabinet note said.
– global bihari bureau
