India’s spacetech startups scale hardware faster than other deeptech sectors

Why deeptech startups struggle to scale

According to a Zinnov-Nasscom Startup Report 2025, India’s deeptech startups have made progress in technical validation but face significant challenges in commercialising and scaling their technology. Many startups stall between seed and Series A funding, unable to move beyond pilot programmes or early deployments.

Spacetech’s edge: A ready-made ecosystem

India’s spacetech startups benefit from a six-decade-old ecosystem built by the Indian Space Research Organisation (ISRO). This includes a network of suppliers for machining, composites, avionics, and environmental testing, which reduces the need to build capabilities from scratch, unlike sectors such as semiconductors.

CVS Kiran, Co-founder and CEO of Red Balloon Aerospace, highlights that spacetech hardware is "low-volume, high-value engineering," contrasting with the high-volume, low-margin model of chip fabrication. This makes it easier for startups to scale without massive capital expenditure.

The sector also benefits from a government that acts as both regulator and anchor customer, providing a steady demand for technology.

Global markets and regulatory support

Spacetech startups have targeted international markets from the outset, unlike many deeptech sectors focused primarily on domestic demand. This global outlook has compelled them to meet international standards early, according to Moin SPM, Co-founder and COO of Agnikul Cosmos.

Moin notes that Agnikul’s early customers were in Europe and the US, which shaped the company’s approach to reliability and commercial terms.

Ranendu Ghosh, Co-founder and CTO of SatLeo Labs, adds that focusing on global markets has helped Indian spacetech startups test their technology against international benchmarks and avoid limitations of domestic demand.

Regulatory support from agencies like IN-SPACe (Indian National Space Promotion and Authorisation Centre) has also played a key role in translating technical ambitions into approved missions.

Lessons for other deeptech sectors

Experts suggest that the spacetech model offers valuable lessons for other deeptech sectors, particularly semiconductors. Hareesh Chandrasekar, Co-founder and CEO of AGNIT Semiconductors, points to the importance of structured government support, including long-term contracts for strategic use cases.

Moin SPM credits Agnikul’s success to developing critical capabilities in-house, reducing dependence on external supply chains and accelerating deployment.

The role of government as an initial customer and mentor, as seen in spacetech, could help semiconductor and robotics startups scale more effectively.

Gaps and future challenges

Despite its progress, India’s spacetech sector still lags behind global leaders in key performance metrics. Venkat Athmanathan, a senior research scientist in the US, notes that scaling hardware to operate at higher flow rates, chamber pressures, and temperatures remains a challenge.

He highlights that while Indian startups like Agnikul have achieved significant engineering milestones, such as successfully firing a liquid rocket engine, performance metrics like chamber pressure still fall short of advanced global systems. For instance, Agnilet operates at around 10 bar, compared to 60-100 bar in high-performance engines.

Athmanathan suggests that publishing more quantitative performance data and benchmarking against international standards could help the industry identify areas for improvement. He also points out that relying solely on international commercial customers may not be sustainable long-term, as many countries reserve launch contracts for domestic providers.

To diversify opportunities, Indian spacetech startups may need to explore stronger markets across Asia and the Middle East.

What this means

Lazyfounder analysis — our interpretation, not reported fact.

India’s spacetech success story demonstrates how a combination of government backing, a mature supplier ecosystem, and a global market focus can accelerate hardware scaling. For founders in other deeptech sectors, the lesson is clear: leveraging existing infrastructure, targeting international standards early, and securing government contracts can reduce the time and risk of commercialisation. However, the sector’s remaining performance gaps also show that scaling hardware to match global leaders requires sustained investment in R&D and benchmarking. This is particularly relevant for startups in sectors like semiconductors or robotics, where the ecosystem is still evolving and government support is less structured.

Key takeaways

• Founders in other deeptech sectors, such as semiconductors or robotics, can learn from spacetech’s playbook: leveraging existing supplier ecosystems, targeting global markets early, and securing government contracts to validate technology.
• The role of ISRO and IN-SPACe as mentors and anchor customers reduces risk for spacetech startups, a model that could be replicated in other sectors with strong government backing.
• Spacetech’s focus on meeting international standards from day one helps startups bypass domestic demand limitations and scale faster.
• The challenge of scaling hardware to match global leaders remains, particularly in performance benchmarks like rocket engine chamber pressure, highlighting gaps for founders to address.