Pixxel, a space technology startup with offices in Bengaluru and California, announced on June 1 that it had raised $36 million in a series B funding round led by Google. This news highlights the rising value of India’s space technology companies during the so-called funding winter. The startup plans to use the money to develop satellites and infrastructure, to hire more people, and to develop its AI-powered analytics platform.
Additionally investing in the round were Pixxel’s backers Radical Ventures, Lightspeed, Blume Ventures, GrowX, Sparta, and Athera.
We were successful in raising $36 million on the market, which was a positive thing. According to Pixxel CEO and co-founder Awais Ahmed, not many businesses in the space sector are now able to raise capital.
According to Ahmed, the investment will be provided as a 100% infusion of primary capital. According to regulatory papers, Pixxel was looking for a $50 million investment. The remaining money, according to Ahmed, was retained as a “buffer in case you want to go out and raise something later,” he added.
The business intends to utilize the money to build infrastructure and satellites as it prepares for a number of launches early in 2024. There will be six “Firefly” satellites in 2024 and another 18 in 2025.
Multiple launches and anticipated team expansion
The business also intends to grow its staff so that more people can work on various projects at once. It currently employs 120 people in Bengaluru and the US, with hopes to increase that number to 200 by the end of the year. Ahmed stated that although most of the hiring would take place in Bengaluru, they will also hire for business development and partnerships in the US and Europe.
The money will also be used to create Aurora, a platform for AI-powered analytics being developed by the startup with the objective of making hyperspectral picture analysis available to everyone.
Pixxel creates and launches hyperspectral photography satellites, which split the light spectrum into hundreds of fine spectral bands to enable improved comprehension and differentiation of everything on the earth.
Ahmed and Kshitij Khandelwal, graduates of BITS-Pilani, founded a firm in 2018 with the goal of developing a constellation of hyperspectral earth-imaging satellites and analytical tools to glean information from space data.
With this most recent round, Pixxel has received $71 million in venture capital. It received $25 million in Series A funding in 2022. A further $2 million was raised by the business, Ahmed continued, bringing the Series A corpus to $27 million. Accenture, an IT consultancy company, has invested in the project as well.
Fundraising during a market downturn
“It took us a lot longer than it did in the earlier rounds. The market can sluggish down. However, I believe that the recent contracts we received and the near completion of our satellites were beneficial to us, Ahmed remarked.
The National Reconnaissance Office (NRO) of the United States announced in April that Pixxel had been given a five-year contract to supply hyperspectral images (HSI). Additionally, the business is eager to use its satellites in the Indian defense industry.
Fundraising for space entrepreneurs is more difficult.
Ahmed claimed that the business spoke with nearly all Indian investors and a large number of foreign investors in the run-up to raising the Series B funding. However, he noted that many funds were not even ready to meet, illustrating the lack of interest in backing the space industry.
“I believe there may be two factors at play when comparing the appetite we previously observed to the hunger we are currently observing. It can depend on how big the circular is. The fewer investors that would be ready to take that risk, particularly in India given that it is still a developing market, the greater the round size becomes, he claimed.
“Most of the time, when people discuss Series B fundraising for a SaaS or enterprise company, they are looking for a specific amount of money that is already flowing in, which is completely different from a hardware company that is developing satellites. It must wait till satellites must launch, and so forth.
Pixxel, on the other hand, simply had to wait longer for results. The amount of money that really converted from the top of the funnel to conversations was lot lower, and from there, conversion was also much lower, according to Ahmed.
