Skyroot in talks to raise $280 million from Fidelity, General Catalyst, Benchmark in Valley VC’s first...

MC EXCLUSIVE Skyroot in talks to raise $280 million from Fidelity, General Catalyst, Benchmark in Valley VC’s first India bet

Hyderabad-based space tech startup Skyroot Aerospace is in advanced stages of raising $280-300 million (Rs 2,600-2,850 crore) from global investors Fidelity, General Catalyst and Benchmark, four people aware of the developments told Moneycontrol.

If the deal goes through, Benchmark will make its first investment in India, marking a significant entry into the country for the storied US venture capital firm that backed companies including Uber, Twitter and Snap in their early years.

Skyroot is now being valued at $2.8-3 billion during the ongoing negotiations, two people cited above said. The final size and contours of the round could, however, change as some of Skyroot’s existing investors, like GIC, BlackRock, Sherpalo Ventures, Arkam Ventures and others, are also looking to participate on a pro rata basis.

“Fidelity will likely put in around $170-190 million, General Catalyst will invest around $70-80 million as part of the round. Benchmark will come in as an investor with a $20-30 million cheque,” a third source told Moneycontrol.

Skyroot, Fidelity, General Catalyst and Benchmark did not immediately respond to Moneycontrol’s queries.

The investment will mark Benchmark’s first known direct investment in an Indian company.

The Silicon Valley-based VC firm has built a reputation for identifying companies early and backing them before they become household names. Its portfolio has included Uber, Twitter (now X) and Snap, among several others.

The Skyroot deal would therefore give the firm exposure to one of India’s most closely watched private space companies, at a time when the country’s commercial space ecosystem is beginning to attract larger pools of global capital.

From $1 billion to a $2 billion ask and now to a $3 billion valuation

The round has become increasingly competitive, driving both its size and valuation higher than what Skyroot had initially planned, according to the people cited above.

Moneycontrol was the first to report on August 5 that Skyroot was looking to raise more than $200 million at a valuation of around $2 billion. The company had also turned the traditional fundraising process on its head, with investors actively pitching to get into the round rather than Skyroot and its bankers approaching funds.

Homegrown investor 360 One was among the many investors that had placed bids in that process.

If the current negotiations materialise, Skyroot's valuation will have nearly tripled the $1.1 billion valuation it commanded just four months ago, when it raised its previous round in May.

The final valuation could move depending on how much capital existing investors commit alongside the new investors.

Vikram-1 changes Skyroot’s fortunes

For Skyroot, this marks a sharp turnaround – from struggling to close a funding round less than a year ago to now attracting some of the biggest names in US venture capital.

A key catalyst has been the company's successful July 18 launch of Vikram-1, India's first privately developed orbital launch vehicle.

The mission marked a watershed moment for India's commercial space industry and gave Skyroot a major validation of its technology and ability to execute. The successful launch has also come as private capital has begun flowing more aggressively into India's space and deep-tech ecosystem.

Founded in 2018 by former Indian Space Research Organisation (ISRO), akin to NASA in the US, scientists Pawan Kumar Chandana and Naga Bharath Daka, Skyroot is India's first space-tech unicorn.

The company is building launch vehicles designed to provide fast, on-demand and cost-effective launches for small satellites.

One of India’s biggest rounds this year

At around $280-300 million, Skyroot's fundraise would rank among the largest institutional funding rounds in India this year, as investors have shown a greater willingness to write $100 million-plus cheques into companies operating in capital-intensive technology sectors.

Moneycontrol exclusively reported on September 24 that AI data-centre startup Nava is in talks to raise $200 million from US investment firm Greenoaks.

Other large rounds reported first by Moneycontrol this year include Sarvam AI's $300 million fundraise, Emergent's $130 million round and Pixxel's $100 million raise.

AI company Brahma AI also raised $150 million earlier this week.

A majority of India's $100 million-plus private funding rounds this year have been concentrated in AI and data-centre infrastructure, reflecting growing investor appetite for businesses requiring significant upfront capital and computing infrastructure.

There have, however, been notable exceptions, including fintech company Navi and electric vehicle maker River, which have also raised sizeable rounds this year.

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