Military surveillance–the new lucrative front for India’s space startups

Google-backed satellite imaging startup Pixxel and cross-city peer Digantara target at least half of their business by launching satellites for defense forces in India and abroad, according to their top executives. Even rocket manufacturer Skyroot Aerospace and a host of smaller startups hope to benefit from such contracts.

India’s private space economy revenue is expected to grow more than fivefold from $8.5 billion to $44 billion over the next eight years, growing at a 23% annualized rate. According to data from India’s National Space Promotion and Authorization Center (In-Space). Although this growth has not occurred so far, analysts say the next three years will be crucial.

Satellite and rocket engineering often takes years and millions of dollars in revenue to produce accurate results. While the state-run Indian Space Research Organization (Isro) has a generally positive global reputation, private space ventures cannot easily support Isro. Industry stakeholders said they will have to prove their products in space.

“Pursuing commercial contracts would be a route to much slower growth and practical revenue streams,” said Chaitanya Giri, a space researcher at the Observer Research Foundation policy think tank. “Instead, most space companies should either focus on defense contracts, diversify their businesses around the world, or establish completely independent entities that will focus solely on defense contracts.”

surveillance work

based in bengaluru Pixxel expects to generate hundreds of millions in revenue over the next three years. “As a result, the increased volume of defense contracts in both the US and India will mean that 40-50% of our revenue will come from defense customers alone,” said Awais Ahmed, co-founder and CEO of Pixxel, a Bengaluru-based satellite imaging startup backed by Google.

According to the company’s applications to the Registrar of Companies, its revenue in FY25 was $4.65 million. Mint via Tracxn.

Digantara CEO Anirudh Sharma said the company will run the company by March 2027. ₹250 crore, of which 80% will come from government-backed customers. “The existing capital we have will be devoted significantly to research and development (R&D) to create satellite-based defense technologies and solutions that we expect to be our main source of revenue over the next two years.”

Pixxel currently operates six ultra-high-resolution satellites that will be launched in 2021 and 2025, transmitting earth observation data to paying customers. CEO Ahmed told Mint It is stated that Pixxel generates almost 80% of its revenue from commercial customers who buy its data and sell analyzes based on the same data around the world.

Digantara, which launched its first surveillance satellite in January last year, announced plans to launch its space mapping satellite constellation for defense operations by the end of next year.

Some of these companies’ early customers include the ministry of defence, the ministry of science and technology (DST), the US space agency Nasa, and European Space Imaging, a German space surveillance data provider.

MoD push

Earlier, the government procured space technology only through Isro. In April 2018, the Center launched the Innovation for Defense Excellence (iDEX) competition to encourage private startups to develop technical applications and products for India’s defense establishments. In 2020, the space sector was officially opened to the private sector.

Pixxel won two iDex projects, allowing the projects to be fast-tracked. One such contract currently generating revenue for the firm is “a dedicated satellite contract with the Indian Air Force, where we are building and maintaining a surveillance satellite contract for their use,” according to Ahmed.

Mint On June 12 last year, it was reported that the Ministry of Defense (MoD) was also considering the issue. India’s private space initiatives for an experimental surveillance project. Contract worth approx. ₹150 crore aims to create an experimental space map to track satellite movement in various orbits.

Sharma declined to comment on whether Digantara participated or won, citing confidentiality agreements regarding “our discussions with the defense bodies.”

So far, India’s four most-funded space initiatives have raised over $315 million in the last five years. Much of this capital went to building and testing the first rockets, satellites, and satellite technologies and getting them ready for operation.

Even early-stage startups like GalaxEye and Bellatrix Aerospace are venturing into surveillance satellite production. Both GalaxEye and Bellatrix announced in June and July last year that they expected defense contracts to be significant revenue drivers.

Pawan Kumar Chandana, CEO of the Hyderabad-based company Skyroot Aerospace, India’s most-funded space venture, said that although the company is a contracted satellite launch operator, defense customers are more likely to use its services frequently.

“In some cases, satellites or the data produced by them may be contracted by their respective countries’ defense agencies, as defense is one of the largest users of space-based capabilities,” Chandana said. he said.

According to Giri, private domain initiatives can help India emerge globally as one of the world’s most strategically important defense suppliers.

“The US is the world’s largest defense buyer, but has strict regulations requiring Indian entities to set up independent operations here,” he said. “While some have done so, focusing on defense requirements in the global south could be a significant source of revenue for space firms moving into defense.”