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January 29, 2024

Bringing Space Within Reach: Why We Invested in Agnikul

Bringing Space Within Reach: Why We Invested in Agnikul

SpaceTech is one of India’s most dynamic startup sectors today, galvanized by the growing geopolitical, telecom, and economic importance of this technology across the globe, as well as the recent moon touchdown of the Chandrayaan-3 spacecraft.

Agnikul, Celesta’s most recent investment with their latest funding announced in late 2023, is an India-based SpaceTech startup that builds launch vehicles which take satellites into low earth orbits, which are typically between 500–700 kilometers above Earth.

Agnikul’s founders realized there were two fundamental problems with how satellites were being sent into space. The first was that launch vehicles today are essentially operated like commercial airplanes. When a plane operates at half capacity, the airline loses money. Agnikul wanted to eliminate this “ride-share problem” concept in the satellite launch industry.

The second problem is that launch vehicles often need a minimum capacity to break even. Vehicle operators need to price every launch such that there is a minimum capacity being taken up into orbit, otherwise the customers paying for their payloads are priced to make up for the empty capacity.

The Agnikul team set out to create a modular launch vehicle, one that can itself be modified to adapt to the amount of payload being launched. A normal launch vehicle would have seven boosters, with each booster an additional cost, which essentially needs to be passed on to the customer.

In Agnikul's rockets, the number of engines can be modified, so they can flex the number of engines depending upon payload requirement. It's like a Lego piece where one can remove engines if one has a lower payload requirement, reducing the associated costs of the entire launch. This novel modular approach to solving these issues is what first drew our interest at Celesta. Agnikul’s vision is to become an “Uber for satellite operators” – anytime, anywhere and affordable.

The company is anticipating its first test launch mid-February 2024. If the launch is successful, then Agnikul will be catapulted into the league of companies like Rocket Lab, which is a listed $2B market cap company.

This launch will deliver a number of firsts for India’s SpaceTech industry. This will be the first ever flight globally with a single piece, patented 3D-printed rocket engine, which was not conceived as possible until now. This would be the first-ever semi-cryogenic engine flight from India, and the first ever suboptimal controlled vertical launch from India. Additionally, this would be the first-ever Ethernet-based avionics architecture flight from India.

The government has realized there is a tremendous amount of innovation being fostered in the private sector, and instead of the government bearing the burden of building these rockets, they can enable startups that have brilliant teams with technical pedigree and private funding. Over the last few years, ISRO, India’s equivalent of NASA, has opened its resources, advisors, facilities, and infrastructure to the private sector and incentivized the startup community to innovate. ISRO has actively sought willing participants to step into the launch vehicle space, designing multiple incentives driving the current boom of SpaceTech companies in India.

Agnikul alone has 20+ advisors ISRO guiding them, a wealth of knowledge and experience. ISRO has created IN-SPACe as a single window agency for all space sector activities of private entities, playing an important role in boosting the private space sector economy in India.

Companies like Agnikul are fueled by a leadership team bringing a fresh, unburdened perspective. Both founders, Srinath and Moin, don't come with extensive experience in space or aerospace. Established veterans in this industry, while valuable, can sometimes carry certain ingrained approaches difficult to shake. Young talent, fresh out of university, bring a unique advantage: a willingness to question the status quo, revert to first principles thinking, and ask the critical questions: "Why are things done this way? Why hasn't it changed?" This inquisitiveness often leads to innovative solutions and fresh thinking, which can be a game-changer. No one else had thought of 3D printing an entire rocket engine from scratch.

Celesta’s team is in the early stages of helping the company scale, working to introduce them to strong finance and sourcing hires, advisors with government access, and other partners. We plan to assist with growth strategies within the US-India corridor, with the long-term goal to help Agnikul access the US space market.

While the company still has much to prove and is seeing new competitors crop up, they have the significant advantage now of a big head start in developing industry knowhow and IP. There are no shortcuts in the space industry, requiring substantial investment of time and effort to develop a viable business and work with regulators for necessary approvals. Agnikul stands out by achieving significantly lower launch costs per kilogram of payload and holding IP on their unique 3D-printing process for rockets and key avionics components.

Looking forward, projections estimate launching nearly 30,000 small satellites into low earth orbit over the next decade, translating into immense potential for global players like Agnikul. With this growth, there's ample room for multiple players, likely specializing across geographies, customer types, and payloads.

Agnikul’s modular approach helps to make them flexible and payload agnostic, able to deliver payloads ranging between 30 and 300 kilograms. This broad scope allows them to remain flexible and capitalize on diverse market opportunities as they continue to grow.

Agnikul embodies Celesta's core mission of backing platforms that bring emerging technologies to meaningful scale. Their platform is an example aiming to revolutionize the way we access space and launch satellites. Agnikul is transforming a segment of the space industry, and Celesta is thrilled to be a part of their remarkable journey.




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