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Agnikul, an Indian space tech startup developing small-lift launch vehicles, has raised $26.7 million in fresh investment as it looks to begin commercial launches using its customizable satellite rocket.

Companies — from big tech giants to startups — are looking to launch their small satellites (up to 500 kg in weight) to space to improve their existing technologies and bring new experiences, such as precise location tracking and internet connectivity for remote areas. As underlined by the European Commission, this has ramped up the demand for smaller rockets.

Small satellites have typically been launched as secondary payloads on larger launch vehicles. Existing players including Elon Musk’s SpaceX have been conducting rideshare missions for small satellite launches. However, their growing demand has encouraged space companies to seek specific solutions. Astra, Virgin Orbit and Rocket Lab are some U.S. space companies that have introduced small satellite launch vehicles to cater to the growing demand. Nevertheless, the gap between the demand and supply of small launch vehicles is still quite significant by most accounts, leaving enough room for new entrants.

Agnikul is one such entrant, via its ‘Agnibann’ small satellite rocket. It will use a single-piece engine with no assembly or conventional manufacturing process to offer a faster production timeline and tailor-made launches. It’ll instead use additive manufacturing, otherwise known as 3D printing – the same approach being taken by US-based Relativity Space. The Chennai-based startup has showcased some glimpses of its plan by launching a 3D-printed engine called Agnilet, which was successfully test-fired in early 2021.

Last year, Agnikul secured a patent for the engine and established its facility to build many such engines using end-to-end 3D printing. It also launched India’s first private launchpad and mission control center at the Satish Dhawan Space Center in Sriharikota, located in the Southern Indian state of Andhra Pradesh, in November and started the integration process of its launch vehicle Agnibaan SOrTeD (Suborbital Technological Demonstrator) in August.

Srinath Ravichandran, co-founder and CEO of Agnikul, told TechCrunch that the startup looks to complement India’s space agency, the Indian Space Research Organisation (ISRO), and is targeting to handle launches in the less than 300 kg payloads segment.

“When the customer looks at India for a solution, we are filling the gap not directly addressed by ISRO today,” he said in an interview.

ISRO currently has its Small Satellite Launch Vehicle (SSLV) to launch satellites weighing up to 500 kilograms in a low-Earth orbit. However, the space agency intends to fully transfer the vehicle to the private sector through bidding.

Ravichandran founded Agnikul along with Moin SPM and IIT Madras professor SR Chakravarthy in 2017. In December 2020, it became the first Indian private space company to sign an agreement with ISRO. Subsequently, the startup began developing its launch service for satellites weighing up to 100 kgs using the Agnibaan rocket into a 700-kilometer (about 435 miles) Earth orbit.

“We have not yet done commercial launches; we have not entered the commercialization phase. But at the same time, today, people are able to look at what we have done with the money we have received, how efficient we have been on capital, and what technology we have been able to build,” Ravichandran asserted.

Without disclosing specifics, he added that the startup has received some inbound interest from potential launch customers, mainly from companies in Europe and Japan, and also signed memorandums of understanding with a few. India also has some satellite tech startups that could become Agnikul’s customers after it starts commercialization following its first test flight, which is expected sometime before the end of 2023.

The space of small satellite launch vehicles where Agnikul operates already has Indian startup Skyroot Aerospace backed by GIC, Sherpalo Ventures and Graph Ventures, among other investors. The latter has Vikram S to take 80 kg payloads to 100-kilometer altitude. Similarly, there is global competition from players including Rocket Lab, which also has the Electron rocket for small satellite launches. However, Ravichandran said the ability to customize the vehicle depending on payload requirements helps bring a cost-effective advantage to Agnikul.

“The vehicle can be tailored to whatever payload is being asked or to whatever orbit it is being asked to go to, without compromising on the cost itself,” he said. “So just because you have only 30–40 kg to launch, we don’t believe in pricing at a very high dollar per kg. We say between 30 to 300 kgs, anyone in that range, the dollar per kg would be still the same.”

He continued that the vehicle is also being designed to be launched using mobile launchpads, and that they can be reused.

Agnikul currently has a headcount of around 225 people, predominantly in manufacturing and launch operations. It operates from four facilities and the mission control center.

With the capital infusion, the startup is looking to go beyond its first few launches and hire talent to help realize and manufacture multiple launch vehicles.

“It’s about getting out of a very design-focused phase into a phase of design+production+manufacturing, with quality as a prime focus, wherein we’ll be able to actually tell our customers that okay, your assets are safe with us,” Ravichandran stated.

“Agnikul’s pursuit of innovative space solutions aligns with our investment focus on India’s leading-edge deep tech sectors,” said Arun Kumar, Managing Partner at Agnikul investor Celesta Capital, in a prepared statement. “We are excited to support their pioneering vision and innovative approach to modernizing and democratizing the space industry. Their mission underscores the spirit of collaboration amongst the Indian Space Research Organization, space regulators, and entrepreneurs in driving advancements within India’s vibrant space-tech ecosystem.”

Agnikul sees an annual demand for about 50 tons in the less than 300 kgs satellite launch segment. Therefore, it plans to develop multiple variants of its Agnibaan rocket and increase launches from one or two per year to one or two per month over time.

“As India’s answer to SpaceX, Agnikul is poised to revolutionize the space industry not just domestically but globally. Led by Srinath, Moin and Prof. Satya, the team is super passionate, and we wish them all the success in their first mission,” said Sailesh Ramakrishnan, Managing Partner at Rocketship.vc, which also participated in the round.

Agnikul is one of the examples of how India’s space tech industry has emerged in the last few years. The country opened its space sector for private companies in June 2020, and created the Indian National Space Promotion and Authorisation Centre (IN-SPACe) as a nodal agency to collaborate with startups. Since then, it has seen significant growth in space activities.

The South Asian nation, which currently has over 150 space tech startups, introduced its anticipated space policy in April, detailing public and private cooperation guidelines. The country also saw successful launches of missions, including its highly acclaimed moon lander mission Chandrayaan-3 and solar probe Aditya-L1. Additionally, India’s growing space activities gained attention — and attracted investments — from big tech companies including Google and Microsoft.

Foreign satellite launches helped India generate $174 million, with $157 million coming in the last nine years, the government recently said in the parliament. However, the industry demands clarity on foreign direct investments in Indian space tech startups and the recently released guidelines for the private sector as it moves forward.

Equity investments in the Indian space tech startup ecosystem soared nearly 312% to $114.9 million in 2022 from $27.9 million in 2020, according to the data shared by analyst firm Tracxn. As much as $65.5 million was invested in 2023 alone.

“From our early days with Agnikul, it’s been a thrilling journey,” said Anirudh A Damani, Fund Manager at Artha Venture Fund. “Now, seeing them draw such esteemed investors showcases not just their current achievements but hints at the groundbreaking feats on the horizon in the space tech sector. Doubling our investment isn’t merely a financial move—it’s a ringing endorsement of our faith in Agnikul’s prowess. We’re all in, eager to see—and support—every giant leap they make in reshaping space exploration.”

The all-equity Series B funding round saw participation from Celesta Capital, Rocketship.vc and Artha Select Fund. Agnikul’s existing investors Artha Venture Fund, Pi Ventures, Speciale Invest and Mayfield India also participated in the round. The six-year-old startup has raised $40 million in capital to date, including the $11 million Series A round in May 2021.