Union Cabinet approves setting up Rs1,000 crore Venture Capital Fund for space sector
Oct 24, 2024
New Delhi [India], October 24 : The Union Cabinet, chaired by the Prime Minister Narendra Modi, on Thursday approved setting up of Rs1000 crore Venture Capital Fund dedicated to space sector, under aegis of IN-SPACe.
Briefing reporters after a meeting of union cabinet, Information and Broadcasting Minister Ashwani Vaishnaw said that 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 Union Cabinet today approved the setting up of Rs 1,000 crore Venture Capital Fund for promoting startups in the space sector," he said.
The average deployment amount could be Rs.150-250 crore per year, depending on the investment opportunities and fund requirements.
The Centre, as part of its 2020 space sector reforms, established IN-SPACe to promote and oversee private sector participation in space activities. IN-SPACe has proposed a Rs1000 crore Venture Capital Fund to support the growth of India's space, economy, currently valued at S8.4 billion, with a target to reach $44 billion by 2033.
The fund aims to address the critical need for risk capital, as traditional lenders are hesitant to fund startups in this high-tech sector.
With nearly 250 space startups emerging across the value chain, timely financial support is crucial to ensure their growth and prevent talent loss overseas, a release said.
"The proposed government-backed fund will boost investor confidence, attract private capital, and signal the government's commitment to advancing space reforms. It will serve as an Alternative investment Fund under SEBI regulations, providing early-stage equity to startups and enabling them to scale for further private equity investments," the release added.
