Indian Spacetech Startups Pivot to Defence as Geopolitical Tensions Reshape the Industry
In response to escalating geopolitical strains, Indian spacetech startups are making a bold pivot from commercial focuses to military applications. Slower adoption rates in the enterprise sector have spurred founders to focus on securing government contracts, offering more predictable budgets and expedited revenue streams .
Companies that once focused on environmental monitoring or commercial satellite imagery are now repositioning their technology for defence use cases . Capabilities such as missile tracking, camouflage detection, maritime surveillance, and border monitoring have become central to their offerings, even when the underlying technology remains fundamentally unchanged .
“Today, around 80% of our revenue comes from government and defence, with commercial only a small portion.”
— Anirudh Sharma, Co-founder, Digantara
The shift began during the Russia-Ukraine war and has accelerated with ongoing conflicts, as demand for tracking space assets and surveillance capabilities surged globally .
The Revenue Reality: Defence Pays Faster
Founders and investors told ET that startups are simply following demand. Defence offers clearer budgets, faster procurement, and immediate revenue—unlike commercial markets, which require building satellite constellations that take years to scale .
Defence vs. Commercial Revenue Dynamics:
| Startup | Defence/Government Share | Commercial Share |
|---|---|---|
| Digantara | 80% | 20% |
| GalaxEye | 70% | 30% |
| Pixxel | Significant (evolved from pure EO) | Reduced |
Industry experts note that the pivot is less about technology and more about positioning. It mirrors global aerospace giants such as Lockheed Martin, Airbus, Boeing, and Safran, which operate on both sides, defence and commercial .
“Everything that goes to space can be weaponised—remote sensing, communications, observation, AI, propulsion, energy systems. Almost everything has dual-use potential.”
— Arpit Agarwal, Partner, Blume Ventures
The Rapid Movers: Startups Leading the Charge
Digantara: From Space Debris to Missile Tracking
Bengaluru-based Digantara Industries began with space situational awareness, tracking debris and objects that could damage satellites. The startup has since expanded into missile detection and tracking, building on the space and ground-based sensing technologies it developed for space surveillance .
In December 2025, Digantara raised $50 million in a Series B round led by 360 ONE Asset and SBI Investment of Japan, with participation from Peak XV Partners and Kalaari Capital. The company’s total capital now stands at $64.5 million .
Key Milestones:
- Launched first space surveillance satellite (SCOT) in January 2025 via SpaceX
- Opened office in Colorado Springs to push into US defence market
- Selected for US Missile Defense Agency’s SHIELD contract vehicle
- Signed contracts with combined value of approximately $25 million
- Operating 25,000 sq ft manufacturing facility in Bengaluru
- Plans to scale to facility capable of building 30 satellites at once in Andhra Pradesh
- Targeting $25–30 million in annual revenue over next 18 months
The company now operates a 25,000-square-foot manufacturing facility in Bengaluru capable of producing up to five satellites simultaneously, with plans to expand significantly. It has signed an MoU with the Andhra Pradesh government to set up a larger facility that could manufacture as many as 30 satellites at once .
Digantara plans to launch another satellite through SpaceX in March, followed by additional launches in June and October, with multiple satellites scheduled for the latter mission. The company aims to deploy a total of 15 satellites over the next two years .
GalaxEye: Earth Observation with Defence Crossover
Earth observation company GalaxEye now sees a 70:30 split between defence and commercial demand. “Given the current geopolitical environment, we expect stronger demand from defence,” said co-founder Suyash Singh .
The company’s technology, which combines multiple sensors including synthetic aperture radar (SAR) and optical imaging, has significant defence applications. The capability to penetrate cloud cover and provide persistent surveillance makes it valuable for border monitoring and military reconnaissance.
Pixxel: Hyperspectral Imaging for Battlefield Assessment
Pixxel has evolved from a purely environmental-focused satellite startup and now serves defence customers. Its hyperspectral imaging capabilities allow:
- Camouflage detection – identifying hidden military assets
- Battle damage assessment – evaluating strike effectiveness
- Detection of illegal mining – monitoring unauthorised activity in remote areas
- Soil disturbance monitoring – identifying potential threats or unauthorised infrastructure
PierSight: Defence Clients as Early Adopters
For PierSight, the shift is less about product and more about customers willing to pay early. Defence clients engage even with one satellite capacity, while commercial customers wait for full-scale deployment or constellations .
The Rocket Builders: Propulsion and Launch Systems
Defence opportunities are not limited to surveillance and imaging. Startups building rocket propulsion systems and launch vehicles are also pivoting toward military applications.
SpaceFields: Dual-Use Propulsion
Bengaluru-based deep-tech startup SpaceFields raised $5 million in a Pre-Series A round led by Globaz Technologies, with participation from Rockstud Capital, Nithin Kamath’s Rainmatter, SIDBI, and others. The IISc-incubated startup develops rocket propulsion systems for defence and aerospace applications .
The startup claims to have won four contracts via the defence ministry’s iDEX initiative and has been granted patents on four indigenously developed novel technologies. SpaceFields plans to use the fresh funds to scale up its manufacturing, secure key regulatory certifications, and expand its teams .
“With Globaz’s expertise in system integration and scale-up manufacturing, together, we are poised to become a cornerstone in India’s journey towards technological sovereignty.”
— Karan Wilkhoo, Director & Promoter, Globaz
NextLeap Aeronautics: From Subsystems to Strike Systems
Bengaluru-based deep-tech aerospace venture NextLeap Aeronautics is steadily moving up the value chain, from building subsystems to delivering integrated platforms, and ultimately, complete mission-ready solutions .
Key Defence Innovations from NextLeap:
| System | Capability | Status/Deployment |
|---|---|---|
| Fibre-optic FPV drone | Immune to RF jamming | Indian Army deployment |
| Aistha fixed-wing UAV | 2-hour flights, 20 km range | ISTAR missions, artillery correction |
| High-speed UAV | Jet-powered strike capability | Lab orders for testing |
| Drone-in-a-box system | Autonomous surveillance, minimal intervention | Security applications |
The company’s fibre-optic-based FPV drone developed for the Indian Army uses fibre-optic links, making it immune to electronic interference—a capability drawn directly from lessons observed in the Russia-Ukraine conflict, where electronic warfare has reshaped battlefield dynamics .
NextLeap’s shift to defence was driven by both opportunity and necessity. “Modern warfare, increasingly defined by unmanned systems, electronic warfare, and rapid-response capabilities, has created demand for agile, indigenous solutions,” the company’s co-founder Alvin Anthony noted .
The Photonics and Laser Edge: Olee Space
Pune-based photonics and defence tech startup Olee Space has raised $3 million in a seed funding round led by Rockstud Capital. The startup specialises in developing next-generation systems in Free-Space Optical Communication (FSOC), quantum-encrypted networking, and directed energy weapons .
The company employs low-powered infrared laser beams to deliver fast and secure data links across land, air, sea, and space. The funds will be used to scale production, enhance quantum-secure communication protocols, and expand the company’s defence technology roadmap .
Olee Space is engaged in discussions with the Indian armed forces and allied defence forces to conduct pilot programs using its advanced communication systems .
The Optical Advantage: EON Space Labs
Hyderabad-based EON Space Labs is a deep-tech startup focused on developing a multi-domain Earth Observation Network. The company designs and manufactures optical payloads for satellites, drones, and UAVs, providing solutions for long-range surveillance, Earth observation, and defence applications .
EON’s Defence-Ready Products:
| Product | Domain | Capability |
|---|---|---|
| MIRA, Argus | Space | EO/IR observation, strategic surveillance |
| LUMIRA | Aerial | Long-range target detection (up to 10 km) |
| BUHO | Ground | Day/night and infrared cameras for armed forces |
The company’s optical payloads have dual-use applications. In agriculture, they can measure soil composition and crop health. In defence, they can be deployed in swarm satellites for intelligence gathering, monitoring sensitive borders, and supporting armed forces operations .
EON Space Labs designs its optical systems end-to-end in-house at its Hyderabad facility, with precision components manufactured in collaboration with HHV Advanced Technologies in Bengaluru. This domestic manufacturing approach reduces dependency on foreign suppliers and ensures solutions customised for Indian operational needs .
The Trade-Offs: Geopolitical Constraints
Tapping defence demand comes with significant constraints. Startups must make tough choices about which countries to work with and which to avoid.
“In defence and government work, you can’t operate across every market. You have to pick your battles. For us, working with a country, though a friendly nation to India, could limit access to the US, and that’s a much larger market.”
— Anirudh Sharma, Co-founder, Digantara
The Russia Dilemma:
While ISRO has historically tested engines in Russia, private startups cannot take the same route without risking access to Western markets. One company building rockets had to let go of testing opportunities in Russia to avoid being shut out of the US market .
Avoided Countries:
- China
- Russia
- North Korea
- Iran
Most founders said they are prioritising opportunities in the US, UK, and European Union .
To navigate these constraints, startups are restructuring operations across regions. Digantara, for instance, operates its core space tracking and R&D out of India, runs missile defence-related products through its US arm, and serves Asia-Pacific governments via Singapore. Such multi-entity structures help companies comply with export controls while preserving access to key markets .
“Once we start delivering data, we will filter certain countries, especially those not considered friendly.”
— GalaxEye Co-founder
The Investor Perspective: Survival and Opportunity
Investors said the shift to defence is largely about survival. In the startup world, survival is critical, and that often means focusing on near-term goals—whether that is one year, two years, or more .
At the same time, founders are putting structures in place to avoid being locked out of global markets. “If you are smart, you will create safeguards such as separate company structures or subsidiaries so that you can still go after commercial contracts where restrictions exist,” an investor noted .
“If they pick defence because it brings revenue, they have to accept that some trade-offs will follow. But if they execute well, geopolitics will not be a major barrier.”
— Vishesh Rajaram, Managing Partner, Speciale Invest
What This Means for India’s Spacetech Ecosystem
The pivot toward defence carries several important implications:
1. Immediate Revenue vs. Long-Term Scale
Defence provides faster revenue cycles and predictable budgets. But commercial markets offer larger scale in the long run. Startups must balance both.
2. Dual-Use Potential Is Real
As one investor noted, “Everything that goes to space can be weaponised.” This dual-use reality creates opportunities for startups to serve both markets with the same core technology .
3. Government Support is Materialising
With emergency procurement and active government engagement, there is real revenue flowing into these companies. Government tenders, iDEX contracts, and defence ministry programmes are providing tangible business .
4. Geopolitical Navigation Is a Core Competency
Success in defence-tech now requires not just technical excellence but also the ability to navigate complex export controls, country restrictions, and multi-entity corporate structures.
5. India Is Building Sovereign Capability
From Digantara’s missile tracking to NextLeap’s fibre-optic drones to SpaceFields’ propulsion systems, India is developing indigenous defence technologies that reduce dependency on foreign suppliers .
The Road Ahead
The Indian spacetech sector is maturing into a dual-use industry, balancing commercial ambitions with defence-driven innovation. Startups that can navigate compliance, sustain research investment, and manage geopolitical trade-offs may emerge as key partners in India’s aerospace and defence future.
Digantara plans to expand its space- and ground-based infrastructure through 2026–27, including additional electro-optical and lidar satellites for space surveillance, space-based sensors for early missile warning and tracking, and a larger network of ground-based observatories .
NextLeap’s roadmap is equally ambitious: move from subsystems to platforms, and from platforms to complete, mission-ready solutions. This includes expanding into long-endurance UAVs, advanced propulsion systems, and integrated defence networks .
The Final Word
Indian spacetech startups are making a bold pivot from commercial to defence applications. Driven by rising geopolitical tensions, slow commercial adoption, and the predictable revenue of government contracts, companies like Digantara, GalaxEye, and Pixxel now derive 70-80% of their revenue from defence and government clients .
The shift is not without trade-offs. Startups must navigate complex geopolitical constraints, choose which countries to work with, and restructure operations across regions. But for those that execute well, the opportunity is significant. Defence offers faster revenue cycles, predictable budgets, and alignment with India’s strategic priorities.
As the global security environment continues to evolve, India’s spacetech startups are positioning themselves as critical partners in national defence. The pivot is not just about survival—it is about building sovereign capability for the next generation of warfare and surveillance.
