The funding value may have gone down but investor sentiment towards India’s deeptech ecosystem has never been stronger, deal activity is stable and more companies are now coming into the space sector. Investors told Moneycontrol that most of the hope is also from the government’s RDI fund of Rs 1 lakh crore.
A new era of spacetech has begun
Last week was more than just an orbital launch for Skyroot Aerospace. This successful first mission of this Hyderabad startup is expected to increase capital flow in India’s new private spacetech ecosystem, and will also benefit those investors who have made long-term bets in this sector. Skyroot, India’s first spacetech unicorn valued at $1.15 billion, is expected to become a benchmark for investors to see how companies operate.
When Skyroot Aerospace recently successfully launched India’s first privately built rocket into orbit, it marked another milestone for the deeptech ecosystem. Yet, while the company was celebrating this success, its fundraising journey highlighted the challenges faced by many of India’s biggest technology startups.
Although Skyroot deliberately prioritized its launch campaign over fundraising, its latest financing round also took longer than expected as new investors were wary of supporting a capital-intensive business with a long path to commercial returns. As a result, most of the latest $60 million round was ultimately funded by existing investors. Spacetech startup Pixel has taken a similar approach, relying on internal backers for the majority of the company’s fundraise, while it continues to be in talks with a few large outside investors, Moneycontrol reported.
What is the challenge?
Investors say that this fundraising journey shows a bigger reality of India’s deeptech ecosystem. The challenge is not a lack of capital or trust, but a lack of growth-stage companies that are mature enough to raise large amounts of money from outside, leaving existing investors to shoulder the bulk of the follow-on funding.
Venture Intelligence data shows that deeptech startups raised about $610 million in the first half (H1) of 2026, down 25 percent from about $810 million last year and down about 72 percent year-on-year (YoY) from the $2.18 billion raised in H2 2025, but investors say the decline is bigger for now. This reflects a lack of growth-stage rounds, not weak confidence in the sector.
What we are seeing right now is more early-stage funding, said Chetan Mehta, founding partner of early-stage deeptech investor Aum Ventures. Some big big-ticket rounds may not have happened and that is why we are seeing this decline. The funding picture may also improve in the coming months as several big rounds are about to be completed.
Electric vehicle makers Ather Energy and River are in advanced stages of raising about $260 million and $85 million respectively, as first reported by Moneycontrol. Meanwhile, spacetech startups Pixel and Agnikul Cosmos are also in the market to raise $80-100 million and $50-75 million, respectively. Overall, these transactions are expected to increase total funding levels and present a stronger picture than a year ago.
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