As India’s space tech funding reached a record $200 million in 2025, Bengaluru has emerged the ecosystem leader attracting more than half of the ecosystem funding, shows a new report by market research firm Tracxn.
According to the report, the sector has raised approximately $871 million in funding as of July 2026. The top 10 most-funded companies alone account for over 60% of this total, led by India’s first Space Tech unicorn, Skyroot Aerospace, at $150M. Skyroot built Vikram-1, India’s first privately developed orbital-class rocket, which successfully reached low Earth orbit on July 18.
Upward trend
The report titled ‘Space Tech in India’ maps 285 companies currently in the Indian space tech ecosystem, with 274 remaining active. Out of these 72 have received equity funding.
From $43 million in 2021 to $200 million in 2025, the sector has seen a steady rise in funding in the last five years. In 2026 till date, the startups have raised $113 million across 24 rounds so far.
Seed-stage funding increased from $7 million in 2022 to $62 million in 2025, while late-stage funding emerged for the first time, reaching $17 million in 2025 and $53 million in 2026 YTD. This signals that a subset of companies is transitioning from the development stage to pre-commercial operations, adding more depth to the sector than just volume, the report notes.
The investor base has also expanded from domestic venture capital firms and angel investors to sovereign wealth funds and global institutional investors.
Scale attracts capital
However, the increase in funding during 2025–26 has been driven by a small number of large rounds rather than a broad-based rise in deal activity, the report points out.
The five largest rounds during this period included Skyroot’s $50 million Series C in May 2026, Digantara’s $50 million Series B in December 2025, EtherealX’s $21 million Series A in December 2025, Bellatrix Aerospace’s $20 million Series A in March 2026, and AgniKul’s $17 million Series C in November 2025. The report shows how, collectively, these rounds accounted for $158 million, representing over half of the capital deployed across 2025–26.
“Skyroot raised funding following Vikram-1’s ground qualification, Digantara after securing its first space situational awareness data contracts, and AgniKul after its successful sub-orbital test flight from India’s first private launchpad. The funding pattern suggests that capital is increasingly being deployed against demonstrated execution rather than future potential,” it notes.
Diversification supported by reforms
The top 10 funded companies collectively raised over $548 million across the value chain, spanning launch vehicles, earth observation and imaging, propulsion, space situational awareness, satellite platforms, and communications.
“This diversification has been supported by the 2020 space sector reforms, which enabled private participation across the value chain, and ISRO’s technology transfer framework, which provided startups with access to technologies, test facilities, and mission expertise that would have been difficult to develop independently,” the report observes.
Bengaluru tops the chart
The funding, however, has remained concentrated in a few cities. Bengaluru continues to be the ecosystem leader with $495 million raised across 106 rounds so far. This accounts for 57% of total sector funding.
Seven of the top 10 funded space tech companies are headquartered in the city. Pixxel, the largest funded space tech company in Bengaluru, accounts for nearly 19% of the city’s total.
Bengaluru is followed by Hyderabad, which has attracted $205 million across 37 rounds, and Chennai which has raised $80 million across 20 rounds.
“Outside these three cities, funding remains limited,” the report notes.
Consolidation in days to come
What is noteworthy is that only 10 of the 285 companies in the sector have raised more than $15 million. While 72 of the 285 companies are funded, the remaining majority remain unfunded in a highly capital-intensive sector marked by long development cycles, the report points out.
“Over the next 12–18 months, the sector is likely to mirror the consolidation wave seen in India’s fintech industry during 2023–24 with mergers, pivots, and closures among companies unable to secure follow-on funding,” the report adds.
Published – July 28, 2026 03:17 pm IST
