By Shruti Menon Seeboo
Anirudh A Damani, Managing Partner of Artha Venture Fund, is a leading figure in advancing India’s space technology sector. Platform Africa had the privilege of catching up with him during his recent visit to Mauritius for the 4th India Africa Entrepreneurship & Investment Summit. During this engagement, Anirudh provided an in-depth look into his firm’s strategic approach to space tech, highlighting Artha Venture Fund’s commitment to nurturing groundbreaking innovations in this field.
His interest in space technology is exemplified through Artha’s investment in Agnikul, a startup that is making waves with its cutting-edge space solutions. Agnikul’s developments, such as the successful test of its semi-cryogenic rocket engine and the use of 3D-printed components, reflect a significant leap forward in the industry. Anirudh’s support underscores his belief in the potential of Indian innovation to make a substantial impact on the global stage.
At the Summit, Anirudh elaborated on how the Indian space sector is evolving and the opportunities that lie ahead. His insights shed light on the strategic investments and support that are vital for fostering growth and innovation in space technology, illustrating how Artha Venture Fund is positioned to play a crucial role in shaping the future of this dynamic field. Excerpts:
- What is Artha Venture Fund & Artha Select Fund’s vision for the Indian space economy over the next 5-10 years, and how do you see it evolving in terms of growth, opportunities, and challenges?
The global space tech ecosystem is projected to reach a value of about $1.1 to $1.8 trillion by 2030. However, estimating the long-term impact of innovation is a complex task. In this context, we foresee India securing a significant 10% market share of the global space tech ecosystem, presenting a substantial $100 to $180 billion opportunity.
Artha’s role is to identify areas poised to address global challenges and leverage Indian innovation, known for being efficient, intelligent, low-cost, and high-quality, to provide solutions for a global economy looking to explore and utilize space resources. Over the next 5-10 years, we see the Indian space economy evolving significantly. Removing regulatory hurdles and introducing favourable policies, such as the recent abolition of the angel tax, will stimulate domestic investments and foster a vibrant startup ecosystem in space technology. Additionally, the Indian government’s commitment to opening the space sector to private players will attract substantial foreign direct investment, further driving growth. This is a testament to the power of Indian innovation in shaping the global space economy.
Key growth opportunities in the Indian space tech sector include the development of small satellites and CubeSats, innovation in reusable rocket technology, and advancements in deep space exploration. However, challenges such as creating a conducive regulatory framework, investing in necessary infrastructure, and building a skilled workforce remain. We are steadfast in our commitment to supporting startups and entrepreneurs at the forefront of this revolution, providing them with the capital, mentorship, and resources needed to turn their visionary ideas into reality.
- How will the recent government initiatives, including the Rs 1,000 crore venture capital fund, shape the Indian space tech ecosystem? What additional policy measures would you suggest to foster innovation and growth?
The ₹1,000 crore venture capital fund for space tech is a significant step by the Indian government, reflecting its clear intent to position India as a leader in high-tech manufacturing and space innovation. This initiative demonstrates the government’s recognition of the potential in the Indian space tech sector and its commitment to nurturing this industry. Over the past few years, Indian engineers have made remarkable strides in space technology, achieving numerous firsts and filing many patents. The Indian Space Research Organisation (ISRO) is already renowned for its cost-effective, innovative, and high-impact solutions, setting a solid foundation for the sector’s growth.
The establishment of this fund indicates the government’s strategic vision to leverage India’s engineering prowess and create a thriving ecosystem for space tech startups. This initiative will provide the much-needed capital, encourage private sector participation, and attract foreign direct investment, further bolstering the industry.
To foster further innovation and growth, additional policy measures could include enhanced collaboration between academia, industry, and international space agencies to facilitate knowledge transfer and collaborative projects. Investing in state-of-the-art research and development facilities and testing infrastructure to support startups and established companies in developing cutting-edge technologies is crucial. Simplifying regulatory processes and providing clear guidelines for startups and private companies to navigate the space tech sector effectively can also stimulate growth. Implementing programs to develop a skilled workforce, including specialized training and education initiatives in space technology and related fields, will ensure a steady talent pipeline. Lastly, offering incentives and grants for research and innovation in space technology can encourage more startups to enter the sector and explore novel solutions.
By addressing these areas, the Indian government can create a robust and dynamic space tech ecosystem that meets domestic needs and positions India as a critical player in the global space economy.
- What specific areas within the space tech sector is your firm looking to invest in, and what are your priorities regarding stages of development or company sizes?
After the successful test from Agnikul, we are expanding our focus beyond launch vehicles. We are now looking at multiple applications of satellites for a wide range of purposes. Our interests include startups addressing space debris, enhancing data download speeds, and using advanced lenses for earth mapping and other applications. We are also exploring emerging areas within space tech that we might not yet fully understand, continuously educating ourselves to stay ahead of the curve. We are particularly interested in startups with a clear vision, a strong team, and a unique approach to solving complex problems in the space tech sector.
In our upcoming fund, we are committed to allocating sufficient capital to ensure that at least 1 out of every 8 startups we invest in comes from the space tech sector. This strategy aligns with the government’s focus on boosting the economy through space technology and reflects our confidence in the sector’s growth over the next 6 years. We prioritize investing in startups at various stages of development, from early-stage ventures to more established companies, as long as they demonstrate innovative solutions and strong growth potential. By doing so, we aim to contribute significantly to advancing the Indian space tech ecosystem.
- Can you elaborate on the technological challenges overcome during the development and launch of SOrTeD and how this success positions Agnikul for future endeavours? What are the key differentiators of Agnibaan compared to other small satellite launch vehicles, and how does Agnikul plan to ensure its competitiveness?
The challenges that Agnikul faced in launching its rockets are multi-fold. This was the first time a private rocket was launched in India from a private launch pad. Additionally, they used semi-cryogenic fuel, the first for India, and a fully 3D-printed rocket engine, a pioneering achievement for India and the world. Considering that India currently has only one launch site in Sriharikota, a lot was riding on this launch for Agnikul, its backers, and the entire space tech ecosystem, including ISRO and the government. The pressure to succeed was immense, possibly even more daunting than the engineering challenges.
The technical hurdles included ensuring the reliability and performance of the semi-cryogenic fuel and the 3D-printed rocket engine, both being done globally for the first time. Extensive testing and rigorous checks were necessary to ensure nothing went wrong, which added to the complexity and intensity of the project. Overcoming these challenges required engineering excellence and a great deal of confidence, emotional resilience, and a leap of faith from everyone involved.
Agnikul stands out from its competitors due to its focus on dominating the global 30-300 kg satellite delivery market. Traditional nano-satellites and small satellites often face long wait times of 2-2.5 years to secure a launch slot on conventional rockets. In contrast, Agnikul’s innovative use of 3D-printed engines, which can be produced in just 3 days compared to the usual 8 months, significantly reduces these wait times. This allows satellite manufacturers to reach space 12-18 months faster, if not more.
Additionally, the Agnibaan rocket, which is only 6 meters tall, boasts a mobile launch pad, another groundbreaking feature. This mobility enables the establishment of multiple launch pads, facilitating faster and more frequent launches than any other current player in the market. Agnikul’s low-cost structure, rapid production capabilities, and flexible launch infrastructure position it to offer unparalleled service to satellite manufacturers, ensuring its competitiveness in the rapidly evolving space tech sector.
The successful launch of SOrTeD has proven Agnikul’s capabilities and set a solid foundation for future endeavours. It has demonstrated that Agnikul can meet the high demands of the space tech ecosystem and has the potential to become a significant player on the global stage.
- How is Agnikul addressing the talent gap in the space sector, and what kind of collaborations are you seeking to accelerate your mission? Beyond commercial applications, how do you see space technology contributing to societal challenges such as climate change, disaster management, and agriculture?
The talent gap in the space tech sector is being effectively addressed in India, primarily due to the country producing over 1.50 million engineering graduates annually. This vast pool of talent provides a strong foundation for the sector. To further enhance this talent, esteemed institutions like IIT Madras and the National Center for Combustion Research and Development (NCCRD) actively train and mentor entrepreneurial talent. The mentorship and support from these institutions and the invaluable guidance from ISRO have been crucial in training and preparing our team for the challenges of working with cutting-edge technology. This collaborative effort has been instrumental in our successes, and it is as much a victory for them as it is for the Agnikul team.
Regarding collaborations, we are actively seeking partnerships with academic institutions, research organizations, and industry leaders to accelerate our mission. These collaborations foster innovation, share knowledge, and develop new technologies to drive the space tech sector forward. We can leverage each other’s strengths and expertise to overcome challenges and achieve our goals by working together.
Beyond commercial applications, space technology holds immense potential to address various societal challenges. For instance, satellite technology can significantly contribute to climate change monitoring by providing accurate and real-time data on environmental changes. This information is vital for understanding and mitigating the effects of climate change. In disaster management, satellites can offer critical data for early warning systems, helping to save lives and reduce damage by providing timely information on natural disasters like hurricanes, floods, and earthquakes.
In agriculture, space technology can enhance productivity and sustainability through precision farming. Satellites can monitor crop health, soil moisture levels, and weather patterns, enabling farmers to make informed decisions and optimize their resources. Additionally, space-based internet services can bridge the digital divide, providing connectivity to remote and underserved areas, promoting economic development, and improving the quality of life.
The applications of space technology are vast and varied, from mapping and geolocation to environmental monitoring and communication. As nations realize the strategic importance of space, there will be a growing demand for satellite constellations to support these applications. Agnikul’s innovative solutions and capabilities will play a crucial role in meeting this demand, helping countries harness space technology’s benefits for economic and social progress.
- What are your views on the current regulatory framework in India, and what improvements would you suggest to foster innovation and growth? How does Agnikul envision the role of private infrastructure, including launchpads, in shaping the future of the Indian space industry?
The regulatory framework for the space sector in India has been evolving rapidly, particularly with the establishment of IN-SPACe (Indian National Space Promotion and Authorization Center). IN-SPACe is a single-window agency facilitating private sector participation in space activities. This is a significant step towards liberalizing the space sector and encouraging private investments. Acting as regulator and promoter, IN-SPACe grants authorizations and permissions to private entities, streamlining processes and reducing bureaucratic hurdles.
However, further improvements are necessary to foster innovation and growth. Comprehensive legislation is needed to cover various aspects of space activities, including space data processing, space insurance, and intellectual property rights related to space activities. Existing policies should be reinforced with robust legal frameworks to ensure clarity and stability for private players.
Agnikul envisions a significant role for private infrastructure in shaping the future of the Indian space industry. The demand for Agnikul’s launchpads is increasing both domestically and globally. These mobile launchpads can be set up at various locations, enhancing flexibility to support frequent, cost-effective launches. This capability meets domestic demand and caters to the global market. Agnikul’s mobile launchpads exemplify the innovative infrastructure needed to support frequent and cost-effective launches, enhancing the ability to conduct multiple launches efficiently and serve a broader range of customers.
The ongoing regulatory reforms and the establishment of IN-SPACe are promising steps towards a more inclusive and dynamic space sector in India. With continued improvements and active participation from private infrastructure like Agnikul’s launchpads, the Indian space industry is poised to become a significant player on the global stage.
- What is the long-term vision for Artha Venture Fund and Artha Select Fund’s involvement with Agnikul Cosmos, and how do you plan to support the company’s growth trajectory and expansion plans? Beyond financial investment, what specific value-added services or mentorship have been provided to Agnikul Cosmos?
The long-term vision for Artha Venture Fund and Artha Select Fund with Agnikul Cosmos is rooted in a deep, intergenerational commitment. With half of our fund life remaining, we foresee a robust association with Agnikul for the next 4 to 5 years. This timeline allows us to decide whether to exit or continue our involvement. However, Agnikul is the kind of investment we believe our Limited Partners (LPs) would happily hold in their personal portfolios even beyond the fund’s life. This is truly an intergenerational holding, reflecting our belief in Agnikul’s long-term potential.
Our role in supporting Agnikul goes beyond financial investment. While we are not technology investors, we describe ourselves as dhanda investors – dhanda means business. We focus on enabling Agnikul to explore new markets and increase its business footprint. We actively seek companies that can utilize Agnikul as a platform and open global doors for them, ensuring they have access to a broader market.
Strategically, we have advised Agnikul on fundraising and financial management. Agnikul’s board includes fantastic investors with deep technology and business strategy expertise, providing a well-rounded support system for Agnikul’s founders. This balanced board has been instrumental in propelling Agnikul to its current heights, and we believe the company is just getting started. The full potential of what Agnikul can achieve has yet to be realized.
Our commitment is to continue providing strategic business advice and leveraging our network to create new opportunities for Agnikul, ensuring they are well-positioned for sustained growth and success.
- How do you see Indian space tech companies positioning themselves globally, and what strategies can be employed to gain a competitive edge? Given the rapid growth of India’s space tech startup ecosystem, how does Artha Venture Fund plan to position itself as a key player in nurturing this growth?
Indian space tech companies are positioning themselves firmly in the global market by leveraging their unique strengths in cost-effectiveness, innovation, and engineering prowess. Companies like Agnikul Cosmos are making significant strides with groundbreaking achievements, such as launching the world’s first fully 3D-printed rocket engine. These accomplishments highlight India’s ability to deliver high-quality, innovative solutions at lower costs than global competitors. By focusing on niche markets like small satellite launches and leveraging India’s extensive pool of engineering talent, Indian space tech firms are well-positioned to capture a significant share of the global market. Strategic partnerships, continuous R&D, and a focus on scalability are vital strategies that can further enhance their competitive edge.
As for Artha Venture Fund, we plan to position ourselves as a key player in nurturing the growth of India’s space tech startup ecosystem by leveraging our unique strengths as a dhanda investor – focusing on the business aspect of space technology rather than the technical details. Our expertise lies in understanding the business opportunities and market dynamics, enabling us to provide valuable strategic advice to founders looking to scale their deep tech applications.
We employ an innovative 1-2-4 investment strategy, allowing us to double down in every follow-on investment round. Starting with an initial $500K investment, we can go up to $2 million by Series A, providing founders with up to $3.50 million in committed capital as long as they perform. This approach is a rare achievement for an Indian investor and demonstrates our commitment to supporting our portfolio companies throughout their growth journey. Additionally, our growth fund, Artha Select Fund, can add another $6-8 million, effectively enabling us to support a company from 0 to 100, unlike most investors who only go from 0 to 1.
By focusing on these strategies and leveraging our business acumen, Artha Venture Fund aims to be the go-to investor for space tech startups in India, helping them navigate the complexities of the global market and achieve long-term success.
