No one had done it before.
When India’s Chandrayaan-3 spacecraft touched down on the moon’s south pole in August, it beat the US, China, Russia and several others. Drawn by the supposed presence of water crystals, several nations have attempted lunar expeditions to the south pole, including a Russian effort that resulted in a crash just days before India’s success.
The achievement is an example of why space investors are now piling into countries like India, those with relatively nascent space agencies that have either been rebooted or newly established. Others include Spain, which launched a new space program this year, and Middle Eastern countries like the United Arab Emirates and Saudi Arabia, which are vastly expanding their space agencies.
VC investment in space-tech startups outside of the US and China has grown in recent years and now accounts for over a quarter of the global total, according to PitchBook data.
India’s lunar ambitions have created a robust startup ecosystem that is ripe for investment. Driven by foreign incentives, a global shift toward commercial space agencies, and government investment directly into the space-tech ecosystem, space-tech investors are seeing new startups emerge and with them new investment opportunities.
Michael Mealling, general partner at space-tech-focused Starbridge Venture Capital, said that venture activity is growing in countries like India as they move to relax their foreign investment laws to attract more money into their space ecosystems. Mealling also pointed out that countries with nascent space agencies have been quicker to engage with the private sector. It took India only three years to open their agency to commercial providers—the US, he said, took 15 years after the passage of the Commercial Space Launch Amendment Act in 2004.
“It’s all about the culture and business environment that is embedded in a country,” Mealling said.
Several startups from emerging space agencies have recently raised notable rounds. In India, satellite startup Pixxel raised $36 million led by Google in June. In Japan, space robotics startup GITAI raised $15 million.
Investors are also paying close attention to countries that are lowering the barrier of entry for startups through grants or funding. Mealling pointed to India, Japan, Saudi Arabia and the UAE as countries that are taking this approach to aiding their space-tech ecosystems. This government investment creates a larger pool of startups for VCs to consider, said Chad Anderson, a managing partner at Space Capital.
“You lower the barriers to entry, you get more players,” Anderson said.
This shift is also helped by investment restrictions and other geopolitical factors that have made operating space companies in the US and China more complicated.
“As middle countries navigate a multipolar world, they stand to benefit from the self-imposed limitations on startups based in the US or China as they can operate without such restrictions,” said PitchBook analyst Ali Javaheri. “Countries like India and the United Arab Emirates have poured billions into their space programs and seek to cultivate a thriving startup ecosystem.”
Featured image by Michael Dunning/Getty Images
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