Union Cabinet approves Rs 1,000 Cr VC fund for space tech sector

Chaired by Prime Minister Narendra Modi, the Union Cabinet approved a Rs 1,000-crore venture capital fund for the space tech sector under the aegis of IN-SPACe.

“The deployment period of the proposed Rs 1,000 crore VC fund is planned to be up to five years from the actual date of start of the fund operations,” the PIB release stated.

Based on the investment opportunities and fund requirements, the VC fund will deploy Rs 150-200 crore per year. 

The fund, announced by Finance Minister Nirmala Sitharaman during the Union Budget 2024-25, aims to advance India's space tech sector, aligning with national priorities and fostering innovation and economic growth.

The estimated funds for the financial year 25-26 is Rs 150 crore, with Rs 250 crore each reserved for the next three years and Rs 100 crore in FY 29-30.

The fund is expected to support approximately 40 startups. According to the Centre, “the indicative range of investment is proposed to be Rs 10-60 crore, contingent upon the stage of the company, its growth trajectory, and its potential impact on national space capabilities.”

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According to the release, the possible equity investment range includes Rs 10 crore to Rs 30 crore in the growth stage and Rs 30 crore to Rs 60 crore in the late growth stage.

According to the release, the centre expects the fund to boost employment in the Indian space sector by supporting startups across the entire space supply chain—upstream, midstream, and downstream. It will help businesses scale, invest in R&D, and expand their workforce.