VCs may warm up to high-tech startups later this year, shows data

VC funding in Indian chip and space startups is gaining momentum in 2026, aided by government support despite cautious investor sentiment

Venture capital (VC) funding in chips, semiconductor design, space, and satellite has been lukewarm, despite the government encouraging Indian companies to go global. Data shows the tide is turning this year, though. 

Since 2023, VC funds have invested $162.1 million across 29 funding rounds in domestic chip and semiconductor design companies. The average deal size in each round was $5.58 million, according to data from Tracxn. 

The data comes as the government plans to co-invest in chip design startups, matching funding from VC companies without any management control. The government announced its new Semicon 2.0 policy last week. 

However, the latest trend in VC funding is encouraging. So far this year, VCs have invested more than $70.9 million in chip and semiconductor design companies — a sharp improvement compared with $53.7 million in 2025. 

VC funding in the space and satellite segment has also been modest — though still better than in chip design — despite coming into the limelight recently following Skyroot Aerospace’s successful Vikram-1 launch and praise from Prime Minister Narendra Modi. 

VC companies have invested $446 million across 89 rounds in space and satellite startups since 2023, with an average ticket size of $5.01 million per round. Crucially, VC funds invested over $175 million in home-grown players in 2025, while $100.7 million has already been raised in the first seven months of 2026. 

Even so, VC funds are treading carefully in these high-tech sectors. Among the top five chip design startups raising the largest amount of money, top spot went to Lemurian Labs. It secured $28 million in Series A funding last December — co-led by Pebblebed and Oval Park Capital, with participation from others — pushing its valuation to $100–120 million. By comparison, the fifth-largest round was $12.4 million, led by Zoho into NetraSemi at a $75 million valuation. 

In the satellite sector, the largest funding rounds stood at $50 million each, raised by Skyroot Aerospace and Digantara. Skyroot secured its round in May 2026, shortly before its rocket launch, lifting its valuation to $1.1 billion, while Digantara raised its funds in December 2025, pushing its valuation to $200 million.