Indian Spacetech Startups Approach $1 Billion Funding Threshold Led by Hyderabad Firms

India's spacetech startup ecosystem is approaching $1 billion in cumulative funding after nearly 15 years, with founders and investors projecting that the next $1 billion could arrive within three to five years. The sector, supported by Hyderabad-based startups including Skyroot Aerospace and Dhruva Space, has expanded from a small cluster of firms to over 400 companies today as private investors and venture funds back high-risk deep-tech ventures.

Market intelligence platform Tracxn reported that Indian spacetech startups raised over $871 million up to July 2026. The sector achieved unicorn status this year after Hyderabad's Skyroot Aerospace reached a valuation of $1.1 billion following a $60 million fundraising round in May. Skyroot currently stands as India's most funded spacetech startup, with total funding reaching $160 million.

Pawan Kumar Chandana, co-founder and chief executive officer of Skyroot Aerospace, stated that multiple companies are moving into growth phases requiring larger sums. Chandana estimated that if five or six companies raise growth capital over the next three to four years, it will generate an additional $1 billion for the industry.

Investor confidence shifted following Skyroot Aerospace's maiden Vikram-1 mission, Mission Aagaman, which demonstrated the execution capabilities of private Indian space firms. Sanjay Nekkanti, founder and chief executive officer of Dhruva Space, said access to capital has changed significantly as investors move into hard tech. Nekkanti noted that the sector could cross the $1 billion threshold as early as this financial year.

Government backing has also played a crucial role in driving startup growth. Lt Gen AK Bhatt (retd.), founding director general of the Indian Space Association, said formation accelerated due to policy measures and initiatives like the Research, Development and Innovation Fund, the Technology Development Fund, and a dedicated Rs 1,000 crore space sector venture fund. Bhatt noted that while venture capital remains the main funding source, traditional banks struggle to lend to space startups because orbiting assets and intellectual property do not match standard collateral models.

Local support mechanisms in Hyderabad are expanding to help early-stage firms. Kavikrut, CEO of T-Hub, said Skyroot's recent success has encouraged early-stage capital. Additionally, Hyderabad-based Abyro Capital launched Beacon, a programme providing $500,000 first cheques to early-stage founders. Abyro Capital adviser Srinivas Rao Mahankali noted that Beacon addresses a funding gap for founders with lower technology-readiness levels.