The Indian National Space Promotion and Authorization Centre (IN-SPACe) has announced a seed fund scheme for early-stage space start-ups in India. The scheme endeavors to encourage innovation and growth in the Indian space sector. The technology startups in the space sector face huge funding issues as financial institutions and commercial banks take a back seat due to lack of clarity on future prospects.
What is IN-SPACe Seed Fund Scheme?
The scheme is expected to provide initial financial assistance to selected Indian space start-ups with innovative ideas, who are facing a fund crunch during the initial stages. Under IN-SPACe the eligible start-ups will get up to Rs 1 crore in funding in three or more instalments, based on the recommendation of an expert committee.
What are the Objectives of the Scheme?
The core objective of the scheme launched by Indian government is to promote the use of space technology by start-ups in India. The funding will facilitate new and innovative technologies development in the space sector and create a framework to engage with space start-ups. In the long run, funding the ideas of tech start-ups in this sector will develop a culture of technology co-creation in the space sector.
Who can apply for IN-SPACe seed fund?
The start-ups who are registered with the Department for Promotion of Industry and Internal Trade (DPIIT) and possess an innovative market fit business idea in the space domain can apply for the scheme. Start-ups must have at least 80% shareholding by Indians (employees, promoters, and angel investors) and should not have gone through a funding round, except for investment from venture capitalists. Promoters and angel investors must invest in the start-up at the time of application and at least match the grant requested. Start-ups should not have received more than Rs 50 lakh of monetary support under any other Central or State Government schemes.
What will be the nature of Financial Assistance?
Under the scheme, a grant of up to Rs 1 crore would be provided to selected start-ups on a milestone basis, in three or more instalments. The amount to be released in each of the instalments will be decided by the Experts Committee based on the progress of the project. The funds would be released only after the start-ups submit proof of achievement of milestones as decided by the committee.
The grant has to be utilized fully by the start-up within a period of three years from the date of receipt of the first instalment of the assistance.
How will Monitoring and Evaluation be done?
The Promotion Directorate of IN-SPACE will administer the scheme, and the progress of the selected start-ups will be reviewed periodically by the Project Finance and Monitoring Committee (PFMC). The start-up will have to provide reports as directed by the PFMC after evaluation. In case of poor performance of any selected start-up, PFMC may decide to discontinue the seed fund support.
What outcome does Indian Government expect from the scheme?
The government wants to foster innovation and technology development in the space sector by engaging Indian start-ups. The funding will help the technology start-ups in the space sector to convert their ideas into commercial products.
Which are the start-up players in the space sector?
Some of the promising space start-ups in India are – Skyroot Aerospace, Pixxel, Agnikul Cosmos, Dhruva Space to name a few. While some of the start-ups are working on their ideas and their services or products are yet to be launched, but 2023 could be a milestone year of the space start-ups.