STARTUPS

Agnikul, an Indian space tech firm creating small-lift launch vehicles, has acquired $26.7 million in new funding as it prepares to fly its adaptable satellite rocket on commercial missions.

Businesses of all sizes, from well-established tech giants to startups, are developing small satellites (up to 500 kg in weight) to advance current technologies and introduce novel experiences like precise position monitoring and internet access for remote locations. The European Commission emphasized that this has increased demand for smaller rockets.

Small satellites have traditionally been launched on bigger launch vehicles as supplementary payloads. Existing players have been undertaking rideshare flights for small satellite launches, notably Elon Musk’s SpaceX. However, their rising demand has propelled space industries to seek particular remedies. American space companies Astra, Virgin Orbit, and Rocket Lab have developed tiny satellite launch vehicles to meet the rising demand. However, according to most assessments, a sizable gap exists between the supply and demand for tiny launch vehicles, providing potential for new competitors.

Through its ‘Agnibann’ tiny satellite rocket, Agnikul is one such participant. It will employ a single-piece engine that doesn’t require assembly or a traditional manufacturing process to provide a quicker production schedule and customized launches. Instead, it would employ additive manufacturing, sometimes known as 3D printing, the same strategy used by Relativity Space, a US-based company. The firm from Chennai has provided some sneak peeks into its strategy by releasing the 3D-printed Agnilet engine, which was successfully test-fired in early 2021.

Agnikul obtained a patent for the engine last year and set up a factory to manufacture several engines using end-to-end 3D printing. At the Satish Dhawan Space Center in Sriharikota, in the southern Indian state of Andhra Pradesh, it also inaugurated India’s first private launchpad and mission control center in November. It began the integration of its launch vehicle, Agnibaan SOrTeD (Suborbital Technological Demonstrator), in August.

Co-founder and CEO of Agnikul, Srinath Ravichandran, told TechCrunch that the company hopes to supplement India’s space agency, the Indian Space Research Organisation (ISRO), by handling launches for payloads weighing less than 300 kg.

In an interview, he stated, “When the consumer turns to India for a solution, we are filling the gap not directly handled by ISRO today.

Currently, the ISRO has a Small Satellite Launch Vehicle (SSLV) that can put satellites into low-Earth orbit that weigh up to 500 kg. The space agency does plan to completely transfer the vehicle to the commercial sector through a competitive bidding process.

In 2017, Ravichandran, Moin SPM, and SR Chakravarthy, a professor at IIT Madras, established Agnikul. It signed a contract with ISRO in December 2020, making it the first commercial space business in India to do so. The business then started working on its launch service for satellites up to 100 kg utilizing the Agnibaan rocket into a 700 km (about 435 miles) Earth orbit.

We have not yet conducted commercial launches or begun the commercialization phase. But at the same time, people can now look at what we have accomplished with the funding we have gotten, our level of capital efficiency, and the technologies we have been able to create, said Ravichandran.

Without going into specifics, he noted that the firm had inked memorandums of understanding with a handful and had some inbound interest from possible launch clients, mostly from businesses in Europe and Japan. When Agnikul begins commercial operation after its maiden test flight, which is anticipated to occur before the end of 2023, certain satellite tech businesses in India may start as Agnikul’s clients.

Agnikul competes in the market for tiny satellite launch vehicles with Indian firm Skyroot Aerospace, sponsored by GIC, Sherpalo Ventures, and Graph Ventures, among other investors. The latter uses Vikram S to lift 80-kilogram payloads to 100 km altitude. Similarly, there is international rivalry from competitors like Rocket Lab, which also has the Electron rocket for launching tiny satellites. However, according to Ravichandran, Agnikul has a cost-effective edge because of the vehicle’s adaptability to different payload needs.

“The vehicle can be tailored to whatever payload is being asked for or to whatever orbit it is being asked to go to, without compromising on the cost itself,” he added. “So we don’t believe in pricing at a very high dollar per kg just because you have 30 to 40 kg to launch. We state that anyone in that weight range would still pay the same $1 per kilogram.

He said that movable launchpads, meant to be reused, will also be utilized to launch the vehicle.

There are now about 225 employees working with Agnikul, mostly in production and launch operations. Four locations and the mission control center serve as its operational bases.

With the additional funding, the firm hopes to go beyond its initial launches and recruit staff to assist in developing and producing several launch vehicles.

Ravichandran explained, “It’s about transitioning from a highly design-focused phase into a period of design+production+manufacturing, with quality as the primary focus, wherein we’ll be able to genuinely convince our clients that alright, your assets are secure with us.

Arun Kumar, Managing Partner of Agnikul investor Celesta Capital, said, “Agnikul’s pursuit of innovative space solutions aligns with our investment focus on India’s cutting-edge deep tech sectors.” We are thrilled to support their ground-breaking idea and creative strategy for democratizing and modernizing the space business. Their mission demonstrates the spirit of cooperation between the Indian Space Research Organization, space authorities, and businesspeople in advancing India’s thriving space-tech ecosystem.

In satellite launches weighing less than 300 kg, Agnikul anticipates a yearly demand of around 50 tons. As a result, it intends to create several iterations of its Agnibaan rocket and gradually raise launch rates from one or two per year to one or two per month.

“Agnikul, India’s answer to SpaceX, is ready to change the space sector nationally and internationally. The team is extremely enthusiastic and is led by Srinath, Moin, and Prof. Satya. We wish them the best of luck on their first mission, said Sailesh Ramakrishnan, Managing Partner of Rocketship. VC, who also participated in the round.

One illustration of how India’s space technology sector has grown during the past several years is Agnikul. In June 2020, the nation opened its space industry to private businesses, and the Indian National Space Promotion and Authorisation Centre (IN-SPACe) was established as a nodal organization to work with startups. Space operations have significantly increased since then.

In April, the South Asian country, which now boasts more than 150 space tech businesses, unveiled its much-anticipated space policy, including public and private collaboration rules. Missions launched by the nation were also successful, including the highly regarded Chandrayaan-3 moon landing mission and the Aditya-L1 solar probe. Big IT firms like Google and Microsoft also noticed and invested in India’s expanding space operations.

According to recent official statements in the parliament, foreign satellite launches have contributed to India earning $174 million, of which $157 million has come in the previous nine years. To go forward, the industry needs clarification on foreign direct investments in Indian companies developing space technology as well as the recently issued rules for the private sector.

According to statistics provided by analysis company Tracxn, equity investments in the Indian space tech startup ecosystem increased by around 312% from $27.9 million in 2020 to $114.9 million in 2022. The total amount spent in 2023 was $65.5 million.

Anirudh A Damani, Fund Manager at Artha Venture Fund, stated, “It’s been a great ride from our early days with Agnikul. Now, watching them attract such prestigious investors demonstrates not only their recent successes but also suggests the ground-breaking advances in the space technology field that are still to come. A ringing affirmation of our confidence in Agnikul’s abilities, doubling our investment is more than a prudent financial decision. We are fully on board and excited to witness every significant advancement they make in reforming space exploration.

Celesta Capital, Rocketship. VC and Artha Select Fund all participated in the Series B fundraising round, which was wholly equity-based. The round included participation from Agnikul’s current investors, Artha Venture Fund, Pi Ventures, Speciale Invest, and Mayfield India. $40 million has been raised for the six-year-old firm, including an $11 million Series A investment in May 2021.