Late-stage funding squeeze; ISRO opens up space

India's late-stage funding market is tightening, with smaller venture cheques, lower valuations and shelved capital raises becoming the norm. In 2025-26, funding fell 38% to $5.6 billion, while the number of $100-million-plus rounds dropped to 13 from 23. Notable deals include Navi's $100 million investment at about $1.3 billion valuations, Yulu's $93 million round, and Purplle shelving a $200 million raise.

Failing to attract large investors, startups are now cutting costs, using more debt, and seeking fewer equity investments. ISRO is reshaping its role in India's space economy by outsourcing routine rocketry production to private companies and PSUs, focusing on new technologies and complex missions. This shift has raised concerns among ISRO employees, who seek clarity on its future role and workforce.

The global space industry aims for a $44 billion economy by 2033, urging India to expand its manufacturing capacity. India's space budget is significantly smaller than that of major agencies, with the Department of Space allocated $1.5 billion for the fiscal year.