Cabinet approves ₹1,000-crore venture capital fund for space tech firms

The fund will be professionally run and will select approximately 40 firms on the basis of commercialization potential, Union Minister Ashwini Vaishnaw said

The Union Cabinet has approved a ₹1,000-crore venture capital fund to support firms in the space tech domain, Union Minister Ashwini Vaishnaw announced on Thursday.

The fund will be set up under the aegis of the Indian National Space Promotion and Authorization Center (IN-SPACe), an autonomous body under the Department of Space. 

The fund will be professionally run, and will select approximately 40 firms on the basis of commercialisation potential, Mr. Vaishnaw said.

The fund will deploy the amount earmarked for it over a period of five years, with a planned deployment of ₹150 crore in the 2025-26 financial year, followed ₹250 crore each in the next three financial years and ₹100 crore in 2029–30.

“The indicative range of investment is proposed to be ₹10 crore-₹60 crore, contingent upon the stage of the company, its growth trajectory, and its potential impact on national space capabilities,” the government said in an announcement.

One of the objectives of the fund is to counter the “trend of Indian companies domiciling abroad”, the government said. “The fund aims to address the critical need for risk capital, as traditional lenders are hesitant to fund startups in this high-tech sector,” it said.

The fund will focus on early-stage investments, and will bank on firms to be able to raise “further private equity investments”. However, even late-stage firms will receive investments ranging from ₹30 crore to ₹60 crore. Firms in the early stage will receive half that range.

India aims to increase the estimated value of the domestic “space economy” from the current $8.4 billion to $44 billion by 2033.

Published - October 24, 2024 05:39 pm IST