Spacetech funding surges as early startups near launches and confidence rises

Data from Venture Intelligence shows $276 million in venture capital flowing into 33 deals in 2025; That’s more than $262 million combined across 28 deals in the previous two years.

Of the 10 largest deals in space technology in 2025, only three went to late-stage established companies, with the rest going to younger companies. The simultaneous flow of capital to first-time founders and late-stage incumbents is indicative of growing belief throughout the industry’s lifecycle.

“The early incumbents in the industry have been able to raise capital, creating confidence in the entrepreneurial community that the investment ecosystem is there to support them,” said Pratik Agarwal, partner at global venture capital firm Accel. “Talent also has a turning point.”

For example, Chennai-based Agnikul Cosmos and Hyderabad-based Skyroot, launched in 2017 and 2018 respectively, initially focused on building space infrastructure. Both companies are currently approaching their first commercial launches, most likely in 2026.

This progress has also begun to attract funds that have been avoided in the past. deep technology. One example of this is Arkam Ventures, a Bengaluru-based early-stage fund that is currently actively evaluating space technology.

The firm plans to make four to five bets from its second fund, which was announced in 2023 and has a target audience of $180 million, and has not yet announced the final closing. The firm invested in Skyroot in 2024 with an unannounced check from its first fund.

“With this investment, we have learned a lot about space technology, including how deep the supply chain is, what the critical components are, what India’s advantages are in the sector,” said Rahul Chandra, managing director of Arkam Ventures. “We are using a lot of this thesis for our next fund.”

ZerodhaBacked by Rainmatter Capital, headquartered in Bengaluru, Rainmatter Capital is also accelerating its deep technology investments and meeting with more space technology companies than in previous years. The firm made an early bet on Agnikul Cosmos and participated in satellite startup Galaxeye’s $6.5 million round in 2024.

“We look at companies more from the perspective of how India can move away from dependence on other countries,” said Dinesh Pai, who manages the firm’s investments.

Crazy in a highly demanding market

In the $276 million fund provided to the sector in 2025, Noida-based drone manufacturer Raphe mPhibir did the heavy lifting by raising $100 million in a financing round led by General Catalyst.

There were only three more rounds worth over $10 million. Two of these went to older companies: Bengaluru-based Digantara and Agnikul Cosmos raised $50 million and $17.5 million respectively. The rest of the money went to young companies.

The clear outlier was EtherealX, a Series A company that raised $20.5 million in a round led by TDK Ventures and BIG Capital, with participation from Accel, Bluehill.vc, Prosus Ventures and four other companies. Two years ago, such a large early stage checkout was almost unheard of for the industry.

However, pre-seed and seed control sizes did not change much. From 2023 to 2024, checks increased from $2 million to $3 million, with no change seen in 2025, according to Venture Intelligence.

However, as competition intensified, investors say that some checks went up to $5 million. For example, Ahmedabad and San Francisco-based Catalyx Space raised $5 million, while Hyderabad-based Cosmoserve Space and Pune-based Olee Space raised $3 million each.

But these bigger checks come with expectations about the founder’s background and depth of technical work.

“Rounds are really competitive for founders who are working on the technology their startup is building and have been doing so for years before they start looking for venture capital money,” said Atharva Shah, senior partner at Rockstud Capital.

Increasing competitive intensity

Many early-stage investors said competition for deals has intensified.

“It is 100% more competitive for high-quality deals,” said Manu Iyer, co-founder and general partner of Bluehill.vc. Mint. “Even on relatively good quality deals, there are four to five funds making plays.”

While previously seed and seed rounds were led by a single institutional investor, early-stage rounds in 2025 and early 2026 are increasingly being led together by multiple funds.

TakeMe2Space has raised a $5 million seed round from Chiratae Ventures, Unicorn India Ventures, Artha India Ventures and SEA Fund. SpaceFields’ $5 million pre-Series A was led by Globaz Technologies, with participation from Rockstud Capital, Rainmatter, Venture Catalysts, and at least five funds.

“The market is definitely more competitive. But that’s a good thing for the founder ecosystem because they can choose more funds that can support them,” Accel’s Agarwal said.

Valuations rose

As more capital chases a limited pool of companies, valuations are also starting to rise.

“I don’t know that valuations are going crazy, but they’re definitely creeping up,” Bluehill’s Iyer said. “Pricing in most space technology segments has been 30% higher than I’m willing to pay. But that’s really just a function of the amount of capital available at the base of the pyramid.”

Deeptech investors often price companies conservatively in their early stages; sharp increases occur as technology readiness improves and commercial viability becomes clear.

Agnikul is a good example. Although capital requirements have slowed as technology readiness has increased, its $17.5 million round in November 2025 valued the company at $500 million, helped by the ongoing launch efforts.

Accel’s Agarwal sees the decline in valuation as a sign of ecosystem maturity. “This is a good thing for founders. It’s cheaper for them to raise money, build milestones, and they dilute equity less.”

It remains central for founders to control how much equity they give up. “Because this industry is capital intensive, founders like me often try to dilute enough to seamlessly raise the next round and the round after that,” said Manu Nair, co-founder and CEO of EtherealX. “Investors often look for comfort in this regard, and so do I.”

The reusable rocket startup’s valuation rose 5.5 times to $80.5 million in the latest round, from $14.5 million after a $5 million seed round in 2024.

More than a rocket

As incumbents move toward launches and satellite Companies are signing defense and agriculture contracts, and investor interest is spreading across the value chain.

Arkam Ventures evaluates domestic production opportunities for the sector, but is also open to downstream applications. “Data-related companies, debris collection and removal games will also emerge,” said Chandra.

Other areas attracting capital include earth observation, space domain awareness, space situational awareness, and in-orbit and in-space services.

Iyer said Bluehill is investigating companies that build avionics systems, satellite infrastructures, control systems, communications arrays and electronic warfare. Rockstud searches for start-ups working on propulsion systems.

Meanwhile, Accel is becoming increasingly optimistic about the space. Agarwal said the firm is researching where it wants to invest across the industry and exploring opportunities. Atoms ‘X’ fragment accelerator program. “We want to be the first partners of those who reimagine what the space ecosystem will look like in the future.”