India’s late-stage VC market contracts as ISRO pivots to private-sector rockets

India’s late-stage venture-capital market is tightening, with total funding down 38% to $5.6 billion in 2025-26 and large rounds falling from 23 to 13, leading startups such as Navi, Yulu and Purplle to accept lower valuations or shelve raises. At the same time, ISRO chairman V Narayanan outlined a new strategy in which the agency will concentrate on cutting-edge missions while delegating the manufacture of mature rockets and routine satellites to private firms and public-sector undertakings, a plan that nine employee associations have asked for clarification on.

The government’s target of a $44 billion space economy by 2033 underpins the shift, which follows the outsourcing models of NASA, ESA and JAXA, despite the Department of Space’s modest $1.5 billion budget. In related corporate moves, Udaan announced the acquisition of Lynk Logistics from Swiggy for Rs 500 crore, giving Swiggy a small equity stake, and W Health Ventures reported closing its second fund at Rs 700 crore to build up to ten health-tech companies. Global IT firms such as Accenture, Capgemini and Cognizant are also outpacing Indian peers on AI-driven consulting revenue.