Understanding the Indian space-tech opportunity

Hello, fellow Olio enthusiasts! 👋

Happy Hump Day and welcome to the 31st edition of Weekly Olio - your weekly dose of giggles, wisdom, and a sprinkle of intrigue with our tantalizing thought piece (yes, we're talking about Publisher's Parmesan here). 🤭

A big shoutout to all of you for the fantastic support and feedback. Let's keep the momentum going in the days and weeks ahead! 😊

Today’s Publisher’s Parmesan talks about India’s high-flying space tech startups. Since launching its first satellite from a USSR-controlled launch station, India and ISRO have come a long way. The lowering of guardrails around private participation has led to a Cambrian explosion of space-tech startups across India. This week, we feature a podcast by our friends at Prime Venture Partners that dives deep into Agnikul Cosmos - an Indian startup that aims to make sending payloads to space as simple as ordering an Uber.

Exciting, right? 👏

Will come to that, but let’s first start with the curation.

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Lessons from Silicon Valley Bank - by Howard Marks

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Understanding the Indian space-tech opportunity

Disclaimer: This content was originally published by Prime Venture Partners as a podcast, edited and republished as an article here.

Srinath Ravichandran, Co-founder and CEO, Agnikul Cosmos chats with Shripati Acharya from Prime Venture Partners.

Shripati: Hello and welcome to Prime Podcast. My guest here today with me is Srinath Ravichandran, Co-founder and CEO of AgniKul, one of the foremost space tech startups in India. Thank you Srinath for joining us.

Srinath: Thank you Shripati for having me here.

Shripati: It’s a pleasure. So let me kick it off right away, what was the inspiration that led you to start AgniKul.

Srinath: So I grew up as an aerospace enthusiast, probably because I was in a family of people who were all into physics in one way or the other. My mom’s a physics teacher. My aunt is a physics teacher. My granddad was in physics. So I guess that that is when the early seeds were sown.

And, I grew up watching PSLV and GSLV launches on Doordarshan. I think actually at that time, GSLV had not been launched, it was mostly PSLV launches at that time or one those, right? But it was time to do engineering or a bachelor’s degree rather, which I wanted to do in aerospace engineering.

No one in my close circle was actually recommending it. And for reasons like, you know, you really do not get a job. It’s not easy. It’s a very tough market and all those things. So I went into my next favorite which was electrical engineering, and from there, you know, a strange set of events and my own choices made me also do a course in financial engineering.

And a little bit of working in electrical engineering and financial engineering and all that made one thing very clear to me that my heart actually is still very much in space. So after a certain amount of time, you know, it took me to build enough guts to say, that enough is enough let us give this an honest shot.

I just sort of flipped back to what I always wanted to do, which was aerospace engineering. I did a masters in Aerospace Engineering from University of Illinois at Urbana Champaign and then moved to Los Angeles because SpaceX is there and there was so much vibe about actually doing some real stuff, that has a business angle in space.

And I really wanted to understand that as much as possible. So that is what led me to Los Angeles. And, It’s the first time I actually thought that there is a problem in the market. Small satellites are struggling to go to space because rockets are too big for them. And I just grew up as a rocket fanboy, as I told you so, yeah, I think, it’s a nice combination of right place, right time, right technology, everything coming together. So that’s sort of how AgniKul started.

Shripati: What is AgniKul’s vision or mission?

Srinath: We want going to space to be the easiest part of doing anything from space. It could be living in space or working from space or putting stuff in orbit or whatever it is. We really want to make it like transportation to space shouldn’t be the hardest part.

So our vision is really about making sure that going to space is as easy as going to any other point on earth. It shouldn’t be harder than that, that that is the mission. To get there, what kind of things you do. You can build better rockets, you can make rockets more accessible. You can build more inorbit transportation.

A lot of things are possible to enable transportation to space to be an easy thing. And that is our plan. We wanna do all sorts of solutions to make sure that going from place to place, is extremely easy, whether the places are, both of them are in space or one of them is in space. That is really what we wanna do.

Shripati: I mean, in that sense, would I be fair to say that it’s no different than what SpaceX’s mission is? Its mission is to reduce the the cost of space travel to 1/100th of what it was 10 years ago to, and then to make, transporting people and everything else to space a lot cheaper, better and faster.

Srinath: Yeah. I do think there is one element of difference there, right? There is this focus on making life interplanetary and all that, that gets spoken about. Generally, when we talk about SpaceX. I think that is, that is one goal, and to get to that goal we will probably have to make space transportation very straightforward, right?

But I do think there are a lot more reasons why space transportation should be straightforward, not necessarily about going and living on another planet. In some sense, yes, there is a huge overlap, but in some sense also, I think it’s a broader goal.

Shripati: Fair enough. What I was saying was that when Elon Musk talks about, SpaceX, he talks about, having a base on the moon and colonizing Mars and so forth.

What I hear you say is, you want to make the transport to space as cheap as possible and as accessible as possible. And, so what are you starting with? Obviously that’s the grand vision. So what is the current product and the current offering?

Srinath: Yeah. So I think the first thing that we figured is to go to space, you need to have really nimble and flexible solutions, machines that take you to orbit, right?

And, rockets today are the only way to get there. So the first set of building blocks that we are building is to make sure that in every aspect of technology required for rockets, we build out something with a single-minded focus on reducing time to go to space.

Let it be in terms of making rocket engines let it be in terms of making other structural aspects of rockets. Let it be in terms of using the right sort of avionics, whatever it is, or even at an operations level, right? What is the kind of configuration, how do you put all of these systems together and get a launch done?

Our focus is on building a set of systems and putting them together in the right way in such a manner that waiting time to go to space - the basic obstacle today, is completely eliminated. So that’s the first product - a rocket that can be completely configured, can be completely customized to take anyone or anything to orbit within a record period.

Shripati: Can you give us some numbers then? Like what was sort of the state of the art or the accepted norms before you came in terms of space. And what is AgniKul doing today? So you have done some test launches, right?

Srinath: Sure. So, I think from our context of what was in the market, so the problem itself, if you look at the way we wanted to structure this, you see the satellite market, so people who are trying to go to space, right? Satellites are a large chunk of that. Now, these people have started shrinking their machines. Basically, satellites became smaller and smaller inside. However, the rockets, which were just vehicles to take them to orbit. They were still sort of stuck in the old era in the 90s, 2000 era, because satellites mostly are electronic competence, right?

And you know what happened with the electronic competence? Everything shrunk, power became computational, more computational power within less volume, less mass and so on. Rockets on the hand had a lot of mechanical moving parts. It had extreme, you know, precision manufacturing requirements. And those things actually did not catch up for a long time.

When you saw the semiconductor industry boom, manufacturing was getting more and more mainstream I would say maybe more and more productionized, but we were not having breakthroughs in manufacturing. Breakthroughs in mechanical systems. So there was a gap where, from a rocket industry standpoint, the customers became completely different in terms of mass and in terms of dimensions. So what used to be satellites that are two tons, three tons started becoming satellites, which are around 200 kgs, 100 kgs. And people also figured that you can have a distributed version of a satellite wherein it’s not a single hardware orbiting earth, but a set of series of hardwares working together. That will actually make one mission possible.

And that inherently also builds in some risk diversification and builds in modularity, builds in configurability. All of these things are also there. So now the new context then became about, okay, when all of this is possible, why are vehicles alone stuck in the past? Because of the way in recent mechanical manufacturing industry or production of any of those systems, And then you saw things like 3D printing start to come in.

You saw things like, MEMS, right? The micro electronic mechanicals, that are small devices that are actually able to capture what big meaningful masks based mechanical systems are actually doing. But at the scale of what a typical semiconductor device would.

So when these things started to come, there was a scope for rockets also to shrink, and so can you make rockets that can take 200 kgs to space, 100 kgs to space, 50 kgs to space. And we see that, even in the last 10 years, the average useful satellite mass, right, which was at least around two tons or so, has now become as low as even 30-40 kgs.

What used to be viable with only a finite kg satellite has now become viable for a 150 kg satellite, which we think in the next three years will be viable for a 50 kgs satellite. So we also realize that rockets should have the ability to scale to be able to scale down or you know, have the ability to actually lower your capacity so that you can accommodate even the smallest customer.

While at the same time also have the ability to address a large set of customers, or you know, one large customer. So when we set out to build a space transportation system, we realized we wanna cut out waiting time completely. We wanted to have a vehicle that is configurable. So think of it as an experience of how one of us on this call actually, like buy laptops, right?

We both are looking at, say, buying a Mac. I’m sure that your requirements on the Mac would actually determine the configuration you choose, even if we agree to buy the same MacBook Pro series, right? You may buy more RAM, I may buy a larger screen size or a larger hard disc capacity.

But still the architecture is the same, and it is possible to scale up or scale down within the confines of the stream, same architecture without calling it another laptop, right? We wanted to bring the same experience to customers here and say between 30 to 300 kgs of satellite mass the ability to configure a mission and launch should have no waiting time or basically waiting time of less than two weeks.

Today those numbers are more like one and half years or so, and the cost per kg for any of these satellite masses is still the same. So a person who’s taking 300 kgs to space, or a person who’s taking 30 kgs to space should not be differentiated on the basis of pricing. Of course, if you want to give a wholesale discount because that is something that you are able to offer for some other reason, that is great, but not from a core mission standpoint itself. Because today that is the norm.

You wanna launch 5 tons on SpaceX, you may go down as low as even $10,000 or $15,000 per kg, but if you’re launching 50 kgs with SpaceX, the number is completely arbitrary. It could be $80,000 per kg, or it could even be $8,000 per kg. If they have a small slot available in any way when there is a vehicle going and you’re just filling up an empty spot and they’re selling and you have a fire sale going on, right? So it’s so unpredictable and it’s very hard to construct business models around something in space when you know that transportation cost is so variable..

So that is what we really try to solve for 30 to 300 kgs capacity vehicles that can be scaled down. Or scaled up linearly keeping the cost per kg exactly the same so that we don’t differentiate between any two customers and do all of this within a two week timeframe.

Shripati: Sounds good. So what is the cost per kg, which AgniKul would be targeting and what is sort of like the state of the art right now? Is there a significant difference?

Srinath: Yeah, so I think today the state of the art market for small satellites is north of $50K - $60K per kg. That’s not what is quoted, but that’s what people end up paying finally.

There’s a lot of fine print that goes on in terms of what gets added on to. What you actually get in terms of launch service itself, like you have to pay for the mounting structures of your satellite on the rocket. You have to pay for the rejection system. Lot of pricing. You know, there are a lot of add-ons that are not exactly optional that get bundled into the pricing.

I will probably refrain from telling where we will let the pricing go, but we are at a fraction of that number, what I just told you in terms of what we incur, right? And that was actually not the goal. I wanna be very clear about that part. In our goal, we just looked at the market and we felt like people were not able to go to space when they wanted to go to space.

So we wanted to keep the cost actually somewhat similar and just solve for extremely low waiting time. But to solve for extremely low waiting time, we had to go into technologies like 3D printing, architectures that are modular, which actually led to a reduction in cost as well. So obviously we were solving for cost all the time, but it was not the core purpose.

It was not to go out there and say we will be the most inexpensive solution to go to orbit. It really was about we will be the quickest solution to go to orbit. But the only set of technologies that we were able to think of, uh, actually led to a cost reduction as well. And that is itself coming to be a meaningful reduction in prices.

Shripati: Understood. So is it fair to say that previously people had a set of rockets and said, okay, show me your satellite, the payload, we are going to mount it on this rocket. And as you said, if there is less or more space available it can go. What AgniKul is doing is actually looking at what is it that you want to send, which is the payload, the satellite, and creating a rocket which is optimized, sort of like a bespoke rocket, which actually goes up and doing it in a very short period of time. Is that the right way to put it?

Srinath: Exactly. So think of the experience of, say you are a customer and you want to put, uh, say a particular mass of 50kgs in a certain orbit, say lower orbit. Uh, say within a three week timeframe, right? We really shouldn’t be asking you anything more than those three parameters I just told you.

So I wanna create an experience for our customers here wherein we ask them, Hey, what is your payload mass? Which is the orbit you want to get to? And what is the preferred location you want to launch from? And based on that alone, we should be able to configure a vehicle and a mission that is able to go to space within a 2-3 weeks time slot. That’s exactly what we’re trying to do.

Shripati: And is it fair to say that typically your payload will be the only payload which is actually going on that rocket? Cause it’s optimized for that payload?

Srinath: It could be. Yeah. Exactly. It’s not like it has to be dedicated, but it can be dedicated. So if there is one more customer who wants to go at the same time, we could take them too. It’s not like it has to be dedicated. If anything it’s the other way around, right? Today the market is, it has to be a rideshare for small satellites. We are saying no, we’re not, we’re not enforcing rideshare as the only way to go to space.

Shripati: Perfect. That’s the first time I heard the word rideshare in the context of space. But I think we all understand. So what is the State of the Union in terms of AgniKul’s products and launches and so forth? Sounds so exciting.

Srinath: Yeah, So I think the team has been doing a lot of good work in the development of various subsystems.

So, if you think of the system as a vehicle. Basically, it is a launch vehicle. That’s what it’s called, right? It’s a vehicle that goes through space. So you have, you can think of all of these systems of a vehicle on the ground that also have some parallel in space systems, right? So you have propulsion system, you have a structural system, you have an AV system, you have software running on it. And you have a little more focus on aerodynamics because of the speed at which you’re going in their routes your exterior design.

Where we are today is we have realized all of those systems and we put together a vehicle we would want to be attempting a test launch hopefully in April. Today’s the first day of April, and hopefully before the next 30 days or so that happens. Very close to that. Let’s see. But the point is that is where we are a few days or few weeks away from our first launch.

We are also gearing up for the next set of launches. Which will be more commercial in nature, not necessarily test launches that we plan to do towards the end of this year and so on. The idea is we have the hardware today or the infrastructure today to make enough hardware to do anywhere between six to eight launches a year, right?

A launch basically every six weeks. And with the revenue that comes in from this, I think we should be able to scale it to even a launch once in a month or something of that sort. But that is for probably two years.

Shripati: Tell us what is the relationship with ISRO and sort of like, how, how does it work for, because I would think that you need a launch site and you would need to launch infrastructure to put all of these things together. So, can you just educate us on that?

Srinath: Yeah. So, you know the way we work with ISRO is more from a regulator standpoint, right? Where they’re a regulator because we need approval from a government authority for launch. So that is where we interact with ISRO, and this is actually a very interesting shift in dynamics over the last three, four years compared to how private players typically interacted with ISRO.

Because ISRO has always been interacting with private players, but it has always been about realizing a particular system for ISRO. Given a particular spec, someone designs and executes, but much more so like the design has been given and you execute and give it to ISRO, but it was all for an Indian Rocket or for an Indian satellite or for an Indian mission.

It was all about serving the government in some way or the other. Now with this announcement of INSPACE, a new body under the Department of Space, which actually in its name itself says Promotion and Authorization Center, right. For space activities, there is a system of framework now available wherein you can do your own thing as a private player and your relationship with ISRO is more from a regulatory approval standpoint.

So we work with ISRO broadly on three things, right? We work with them on getting some of our systems tested. So for example, we had the opportunity to take our engines once that were designed, manufactured and tested a few times in-house also to ISRO to test it there.

And there was a lot of validation for us in terms of understanding how to look at that hardware. Even though it has worked for us, it was important for us to get that validation from ISRO. The other way in which we work with them is have a bunch of reviews, have a bunch of discussions, because we’re sitting on 60 years of success and failures that ISRO has seen.

And, a lot of, a wealth of knowledge that actually is helping make India a space faring nation. And it’s actually one of the advantages of building a space tech company in India. I think you are not, you are not starting at zero. You’re starting at, you know, 90, right? And yes, there’s always more to do, but all the basic building blocks in terms of what not to do is very clearly out there.

The knowledge is out there. So, working with ISRO from a review standpoint is the other thing that we do. And then finally also the ability to use their facilities for launch. For example, they allowed us to build our own private launchpad within Sriharikota for example. And those kinds of things, which was, we, we obviously did not even think it was possible when we started.

But our mission was always about, you know, having mobile launchpads, having our own launchpads because we knew that when you’re building new tech, your interface point with the launchpad cannot be something like, what is there for a bigger vehicle? Because when you shrink a vehicle, a lot of these mechanical things completely shrink.

For example, a plumbing line that is serving a very large vehicle can in no way be used to serve a vehicle that’s very small because it’ll just not make sense to have that kind of a volume to fill. It’ll be like, you know, you’re having this huge hose to fill a small tumbler of water. It doesn’t make sense, right?

Very similar concepts apply when you’re filling your tank, for example. So we are very clear from the very beginning that to be able to address customers quickly, you should control the end to end of the process of the launch. There is no point in saying, yeah, I’ll build vehicles very quickly, but sorry when it goes to the launchpad I’m at the mercy of someone else because no one cares. To some extent, no one cares whose facilities you use to launch and all that, right? I want something in orbit. That is all I’m gonna ask from our launch vehicle there. So we are very clear on owning both pieces of that, building the product and doing the service of launch.

And for doing the service of launch, you need this launchpad infra, which we wanted to do mobile based out of all these. 40 feet cargo containers, right? Mm-hmm. So that is what we use even today. That’s what we use. So ISRO has allowed us to even build our own launchpad within its own facility at Sriharikota. So I think those are the ways in which we have been interacting.

There is a lot of alignment from very senior level at the government about making sure that, you know, private players in India are able to access the space market because given the level of success that you’ve had in SpaceX. The chunk of the business that we are getting in space is actually a fraction of the total.

I think that can easily change by allowing more private player participation in missions that are not even related to the government. Of course, you could also do it for the government. That’s not changing. But as an add-on, can you also do your own stuff wherein the government comes in and plays the role of a regulator?

So that is now already in place. A system is in place. And I think that is something that has been helping us. And this is not only about Angnikul. This is about all space startups in India getting that benefit. So, that’s basically how we work with ISRO.

Can't get enough of this conversation? Us neither! Check out the full episode below to satisfy your craving for more insights and ideas (directly jump to 25:55 to continue ahead). 😃 

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