Small-Town Startups | How a visit to Elon Musk’s SpaceX factory inspired this young techie to build India’s first private earth-imaging satellite

Note to readers: What are the next Zomatos and Flipkarts of India? What if they are growing in the hinterland, out of earshot and away from eyeballs? India does have such startups but they struggle for attention or are not thrilled with the limelight. Small-Town Startups is a series of articles that shines a light on enterprises focussed on customers based in India’s tier-2 cities, townships and other non-metro centres.

To enter into the space, the first and foremost thing required for you is to be a dreamer, believes 23-year-old Awais Ahmed who is all set to send India’s first private commercial earth-imaging satellite into the space.

Born and brought up in a small town of Chikmagalur district in Karnataka, Ahmed’s family wanted him to be good in studies and pursue a decent job. But much like thousands of youngsters these days, Ahmed wanted to do more in his life. While pursuing his engineering BITS Pilani, he chose to become an entrepreneur and that too in a segment which has not many takers as of now – space.

While his parents supported him in this endeavor their apprehension was well visible on their faces, according to Ahmed. Two years down the line, his venture Pixxel Space, is ready with India’s first earth-imaging satellites. The launch is scheduled to happen in February in partnership with Indian Space Research Organisation (ISRO). The satellite is expected to offer a dataset with global coverage every 24 hours that will allow organisations to monitor as well as predict global occurrences in real-time.

In a candid conversation, Ahmed talks with Moneycontrol about how this whole idea came into existence, the challenges of building a space start-up in India and the investor’s sentiment towards this segment.

Q. Why did you choose space as a sector?

I think all of us have always been fascinated with the stars and the universe. Like every other kid I used to read a lot about these things. I had my telescope and encyclopedia. But there were a couple of experiences while being at BITS Pilani that enabled Pixxel.

The first one was when I became a part of the student satellite team while in the first year of college. This was a team that was working with ISRO. At that point in time, ISRO had a student satellite program, where they would help universities build very small amateur satellites that they would launch for free. So, that gave me first-hand knowledge of how actually you build hardware for space, because building hardware for earth and building it for space, requires an entirely different mindset.

The second experience was when I was one of the founding team members in engineering lead at Hyperloop India. SpaceX had this competition. They built a one-mile long vacuum tube right beside their headquarters. They proposed a challenge to teams around the world to build a vehicle that would travel at really fast speed and whoever did the fastest would win.

Out of 2,500 global teams that applied from the likes of MIT, Harvard and others, 24 were selected.

Hyperloop India, the team I helped found as leading the engineering, became the only Indian finalist to be selected. So, we built the vehicle in Bangalore. We took it to SpaceX HQ in Los Angeles. We presented it to Elon Musk and the team. But then while we were there, they took us on a tour of the SpaceX factory.

So, seeing the rockets, engines being built … touching the rockets that have gone to space and come back was the moment for me …. I was like this is a place for me to be in. So, after coming back from there, I read up as much as I could about space and decided that we’ll start with analysis of satellite imaging.

While doing this is when I realized that there’s probably an opportunity to do a much better type of imaging. It was then that I brought in my co-founder Kshitij and that’s how it began.

Q. You have said that you come from a very modest background. How supportive were your parents when you told them about your plans to launch a space startup?

My father runs a small pharmacy and my mom is a homemaker but I had everything in terms of education while growing up. When I joined BITS, like any other set of parents they were like, study hard, get a good job, in a good company and then you don’t have to worry about anything else.

But this is something that came up where I saw an opportunity. I told them this is something I wanted to do and they were quite supportive. But in the hindsight, I think they were worried internally but never let it reflect.

Q. You call your satellite Anand. Is it going to enter the space to demonstrate technology?

Yes, Anand is a tech demo satellite. We needed to build something very basic. And that’s how we build the camera that could go up there, work on its own autonomously and beam down the data. That’s essentially all it needs to do. Even if it beams down just one image and then dies off, we would have completed the mission, because we need to prove that this satellite that we have built can beam down good quality data from the space.

So, manufacturing of that began in July 2019 and by Jan 2020, we had completed it. After that, we have been predominantly testing. 4-5 months were taken away due to COVID and lockdown because we needed to work physically. And just over the last month, we have the satellite undergoing rigorous testing and we’re almost done now with the launch coming up next month.

Q. What exactly will the satellite do?

See what we are building is a constellation of satellites that have cameras on them. That will take pictures of the earth. What we are expecting is that once those pictures are beamed down to our data centers, we will have algorithms and the models that can take this data and convert it into useful output for a lot of system organizations.

Just taking a few examples, it can be used to understand climate change, forestry, urban monitoring etc. For an agri company or fertilizer company, it will be able to look at the soil and identify which nutrients are lacking, what fertilizers to use etc.

The plan is to have 30 satellites in the constellation that will provide global coverage every 25 hours. When we started out we realised that in most cases, existing satellite imagery wasn’t really good enough to even see certain problems. That is where our tagline of Seeing the Unseen was drawn.

The second tech demonstrator will go up by December. It will be a better version of the first one with the lessons that we learn.

Q. So when you’re saying commercial what sort of customers are lining up for this?

We have customers already lined up who want to check out the data and have signed contracts. I can’t take names but the customers are in agriculture, oil and gas and urban monitoring spaces. And these are not only Indian but also companies from the US and the Middle East.

Q. What has been the investor interest in your start-up and this whole sector in India so far? What amount of investor queries do you get?

It has changed in the last one year or so. In the late 2018… it was very tough to talk to venture capital funds and raise funding. Most of them still saw it (our startup) as a student project that we were looking at given that we were still studying in the final year.

But what helped at that point was when we tapped into the BITS Alumni network, where a lot of angels came in besides one institutional investor. But very recently when we had another set of conversations in late 2019, for our next round a lot more investors were interested.

Q. What changed?

Success stories started to come out. SpaceX was doing significantly good. And a lot of companies got registered in the spacing domain in India. They saw that internationally this is a space where a lot of investment was going in, and in India they started building the thesis.

There were quite a few venture capital firms that were willing to take a bet and these were mostly early stage small funds, micro VC funds and seed stage funds.

Internationally also we could see a lot of exits happening and funding going into space, which also spurred up last year the intent of building thesis at least, even if they’re not investing. And that number has been consistently increasing after we announced our seed round in August 2020, many more of them reached out as well to start building their thesis.

Large funds would still prefer doing that (investing) in software or full tech start-ups and not take a risk in space. So, compared to the world, India was still sort of quite lagging in the investment sector.

Q. How much money have you raised and what amount is required for the expansion?

We have raised about Rs 40-42 crore. We would require Rs 280-350 crore more to deploy the entire constellation. But there’s essentially two ways from here. We have enough money today to do 3 to 4 launches. We are doing two this year. We have enough money to do 3 to 4. And we can use the revenue generated from this data, from these satellites to slowly build a few more satellites and keep on adding. So that’s one way that we wouldn’t need to raise much more and we can continue to build at our pace.

The second pathway is we go and raise $10-20-30 million to start putting in multiple satellites at time we should need more revenue. So to answer your question in two ways, I can either choose not to raise a lot and then keep on building on what we have. Or if we were to complete a venture capital funding, I would say $30-50 million is what we would need in total for 30 satellites.

Q. And the timeframe would be?

We plan to complete the 30 satellite launches by the middle of 2023.

Q. Which would mean that you would need to start working on your fundraising plans as we speak?

Actually after the first launch. I mean having data from space would be critical. So, three-four months after the launch, by April-May is when we would look at raising the next round of funding.

Q. You are currently working with ISRO on this project, but earlier you were in talks to partner with a Russian agency. How did that change?

So, we have built a satellite and at the end we need someone like an Uber to take us from the ground to the space right. There are multiple launch providers who do that. ISRO in one, the Russian Space Agency is other, SpaceX is another ... So, we took a look at who was providing it at what costs and when they were launching because the timing needed to be right.

And at the point when we decided to get into the contract with the Russians, the reforms in India for the space were not announced. So we just went with the Russian Space Agency but after the reforms were announced last year, we worked closely with the Department of Space and ISRO to see if we would also prefer to launch it from India.

Logistically, it makes sense, right? We are manufacturing here, why we would ship it all the way to another country, when we can just launch it from here. And cost wise also it’s quite competitive. We would get the support of scientists that have been here. So we talked together and said, how can we make sure that this shifts. The Russian launch also got delayed quite a bit. They were initially supposed to launch in July or August 2020. It got shifted to December because of COVID and then to March. Whereas the ISRO launch is going up in February.

Q. Prime Minister Narendra Modi Tweeted in response to one of your Tweets acknowledging the importance of space startups in India... How did you feel after that acknowledgement?

I think the government has taken a conscious decision that they need to focus on space as a priority sector. There’s no private company that has launched its own satellite here as compared to places such as the US.

So that is where it all started from and measures announced to revitalize the economy. They announced that space will be open to private space and ISRO will have to make sure that it builds equal footing and all that. After that the Department of Space and ISRO got to working.

How the Tweet sort of came to me was ISRO reached out to us and said that the Prime Minister wanted to have a chat with a few select start-ups from the country in December. There were a few large companies besides startups such as ours, Agnikul and Skyroot.

We all presented what we were doing and what the plans are and how it would benefit India and then at the end, he spoke to all of us saying that, see this is a very important sector in terms of private growth. How the IT industry has sort of grown and known to be world class now. They would want space to also be the same especially given how well the ISRO has done and utilise that expertise.

Which obviously means a whole lot to people that are working in this space, because until early last year, there were no reforms, there were no way for a private company to launch rockets or satellites and things like that. But now that has changed, so coming directly from the top, from the Prime Minister, meant quite a lot.

Q. What are the challenges of setting up a space start-up in India?

I think the biggest challenge till date was regulatory uncertainty. We could build a satellite here on ground. Yeah, for sure. I mean, just like building a computable operating space with a camera, and solar panels and batteries. But at launch, it required certain licenses. You need to register your frequencies with the International Telecommunication Union. You need to register your satellite as a space object with the United Nations and overloads and things, which is what a country would help with anywhere else.

That is something we didn’t have until very recently. So that has been the biggest challenge, but now that’s sort of taken care of. Even though it’s still a draft, it needs to convert an Act.

The other challenge is the access to capital. This segment requires either a significant grant funding from the government or access to a VC Fund because this is a very capital intensive business.

Q. What’s your vision with these satellites?

It’s to help make the world a better place. How do we do that? Say for example, in agriculture, we help it make it more efficient by identifying when to use fertilizers, or we help tackle air pollution and water pollution and monitor where it is happening, or helping identify where deforestation is happening and things like that.