Space startup CEOs applaud Rs 1,000-crore VC fund, but say more govt investment needed for growth

Digantara CEO Anirudh Sharma, Piersight's Gaurav Seth and Pixxel's CEO Awais Ahmed at Moneycontrol Startup Conclave

The Rs 1,000-crore venture capital fund announced in the Budget for the space sector is a positive step but larger sums will be required for the growth of the capital-intensive segment, top startup chief executives have said.

Digantara CEO Anirudh Sharma, Pixxel's Awais Ahmed and Piersight's Gaurav Seth said even a Rs 10,000-crore fund would not be enough in the long run, as countries such as the US, China and Finland have invested billions of dollars for space tech.

"For somebody who is not from the sector, definitely Rs 1,000 crore seems like a really big number. But for somebody doing deep tech, it's not enough. But I would say it's still a very significant step that the government has taken to show commitment towards sunrise sectors like space tech," Sharma said during a discussion at the Moneycontrol Startup Conclave.

Finance Minister Nirmala Sitharaman on July 23 announced that the government would set up a VC fund of Rs 1,000-crore for the space sector.

"With our continued emphasis on expanding the space economy by five times in the next 10 years, a venture capital fund of Rs 1,000 crore will be set up," Sitharaman said while presenting the Budget for the financial year 2024-25.

The government’s move would attract a lot of investments but in the long run, larger sums would be required, Sharma said.

Ahmed was of same opinion. "I think we ought to be cognisant that since the privatisation of space, the liberalisation of space was announced, it's been barely four years since that was announced.

"And second, most of the startups kickstarted their operations in 2017, 2018, and 2019. And so you can think of the Rs 1,000 crore fund as probably the seed fund for this sector," Ahmed said.

Countries like the US, China and Japan have funded several spacetech startups. "Given the stage where we are, I would say, great start, absolutely no complaints there. But as the sector grows, I would say, yeah, we will probably need a Rs 10,000-crore growth fund at some point, and also to back the winners and double down on the winners," he said.

Seth said, "The first time when someone offered me a Rs 1-crore cheque, it was enough for me to quit my job and start a startup. So, so many such seeds can be planted using this fund and, you know, we can see a lot of good outcomes coming out of it."

Watch the full edition of the Moneycontrol Startup Conclave 2024 here.