From ‘cab to space’ to a $600 billion industry: Why Skyroot is betting on India's private space opportunity

India's private space sector is preparing for a crucial test.

On July 18, Skyroot Aerospace is scheduled to launch Vikram-1, India's first privately developed orbital launch vehicle, from the Satish Dhawan Space Centre in Sriharikota. If successful, the mission will mark a major milestone for the country's private space industry.

But the real test for Skyroot is bigger than whether one rocket can reach orbit.

The company is trying to answer a more difficult question: Can a private Indian company turn a successful orbital launch into a reliable, repeatable and commercially viable business?

That is the opportunity behind Vikram-1.

Skyroot is targeting a specific gap in the global launch market — customers that want to send smaller satellites into specific orbits without waiting for space on a larger rocket or compromising on their preferred launch schedule.

The company describes this as a “cab to space” model.

And it is betting that this market will remain undersupplied for years.

Why Vikram-1 matters

Skyroot's Vikram-1 is not the company's first rocket.

In 2022, it launched Vikram-S, a suborbital rocket that reached an altitude of 88 km. But Vikram-1 represents a much bigger technological and commercial leap.

The rocket is about seven storeys tall and is designed to carry satellites into low Earth orbit, around 450 km above the Earth's surface. It is four times larger than Vikram-S and must accelerate to around 8 km per second to achieve orbit.

That makes the move from suborbital flight to orbital launch a significant one.

“It's probably an order of magnitude more difficult because the rocket is far bigger. It has multiple stages,” Pawan Kumar Chandana, Co-founder and CEO of Skyroot Aerospace, told CNBC-TV18.

The mission, named Aagaman — meaning arrival — is the first of three planned launches intended to validate Vikram-1 before regular commercial missions begin.

According to Chandana, the rocket is fully designed and manufactured in India, with more than 90% of its components sourced domestically.

The first mission will carry four satellites, including payloads from Skyroot, Indian startups Grahaa and Cosmoserve, and German space technology company Dcubed.

That international payload is important because it highlights the market Skyroot is ultimately targeting. The company's customers do not have to be limited to India. A launch provider can potentially serve satellite companies from across the world.

What does ‘cab to space’ actually mean?

To understand Skyroot's business model, it is useful to look at how satellite launches are typically arranged.

A large rocket often works like a train. It carries multiple customers and follows a launch plan built around a primary mission or a group of compatible payloads.

That approach can be cost-effective. But it also means a satellite operator may have to wait for a suitable rideshare opportunity.

The satellite may also have to accept an orbit, launch date or mission profile that is not its first choice.

A smaller dedicated launch vehicle works more like a cab.

The customer effectively books the entire vehicle and has greater control over where and when the satellite is deployed.

“For example, you're doing cabs to go to space. It's a niche market. It's a unique market, and it's a very underserved market in the space sector,” Chandana said.

The trade-off is cost.

A rideshare customer shares the cost of a larger rocket with other payloads. A dedicated-launch customer pays for the entire vehicle.

But for some satellite operators, the value lies in flexibility.

A company may prefer to launch at a particular time, reach a specific orbit or avoid waiting months for a compatible rideshare mission.

That is the market Skyroot is targeting.

For a Vikram-1-class vehicle, the company expects long-term revenue per launch to be around $10 million.

Why does Skyroot think this market is large?

The number of satellites being launched globally is increasing as space-based applications expand.

These include communications, Earth observation, navigation, scientific research and a growing range of commercial services.

But satellites are only useful if they can reach orbit.

That is where the industry's biggest bottleneck remains.

According to Chandana, demand for launch services is significantly higher than supply. Skyroot expects that imbalance to continue for the next five to 10 years.

“This is one industry where the demand is much higher than the supply,” he said.

For Skyroot, this creates an opportunity. But demand alone does not make a launch company successful.

The company must first demonstrate that its rocket can reliably reach orbit. It then has to manufacture enough rockets and conduct enough launches to turn that capability into a repeatable business.

Skyroot currently has three factories in Hyderabad, with a combined capacity to produce more than one rocket a month, according to Chandana.

It is working towards increasing that capacity to two rockets a month, although doing so will require additional infrastructure investment.

The company is already manufacturing its second test-flight vehicle and expects to launch it this year.

The real business model is reliability

A rocket is not a conventional product.

If a consumer product fails, it can generally be replaced. A failed launch can destroy a customer's satellite, disrupt an entire mission and damage the launch provider's reputation.

That makes reliability one of the most valuable assets in the launch business.

The first question for Skyroot is therefore not how quickly it can build more rockets.

It is whether Vikram-1 can consistently reach orbit.

“There are very few reliable options globally,” Chandana said. “Hardly a couple of companies are doing launches regularly around the world.”

That scarcity can create pricing power for launch providers with a proven track record.

This is also why the economics of the launch business can be counterintuitive.

Why better technology may not immediately mean cheaper launches

It is tempting to assume that technological progress will automatically make space launches cheaper.

But the price paid by a customer depends on more than the cost of manufacturing a rocket.

There is also the value of reliable and scarce access to orbit.

A launch provider may reduce its manufacturing cost through better technology, improved production processes or reusable systems. But if the number of reliable launch providers remains limited and demand continues to exceed supply, the price charged to customers may not fall at the same pace.

That is the dynamic Chandana described when he said:

“Costs are going down, prices keep going up.”

In other words, the cost of producing a launch can decline while the market price remains high if access to orbit remains scarce.

That could change as more companies enter the market and reusable rockets become more widespread.

For now, however, reliability remains a major barrier to entry.

Why small rockets may be only the beginning

Skyroot's immediate focus is the smaller, dedicated-launch market.

But the company is also working on reusable launch technology, although Chandana said that development is still a few years away.

The company's longer-term ambition is to address a larger part of the launch market.

The cab-and-train analogy helps explain this strategy.

Smaller rockets can serve customers that want dedicated access to a particular orbit. Larger and potentially reusable vehicles could serve the much bigger market for high-volume launches.

The two markets are different.

For now, Skyroot is focusing on proving the cab model.

The longer-term ambition is to build the capability to operate at a much larger scale.

India's advantage: the ecosystem already exists

One of the biggest advantages for India's private space companies is that they do not have to build the entire space infrastructure from scratch.

Vikram-1 is being launched from ISRO's Satish Dhawan Space Centre.

Skyroot has also used existing testing infrastructure at Sriharikota for its rocket engines.

An orbital launch requires a complex ecosystem, including launchpads, tracking radars, antennas, ground stations and facilities for integrating and assembling the rocket.

Building all of that independently would require enormous capital and years of development.

India's space sector reforms have opened up access to some of this infrastructure for private companies.

That allows companies such as Skyroot to focus more of their capital on rocket design, manufacturing and technology instead of duplicating infrastructure that already exists.

For a young launch company, that can make a significant difference.

The $600 billion opportunity is bigger than rockets

The opportunity Skyroot is targeting is part of a much larger global space economy.

When Chandana refers to a space industry worth around $600 billion, that does not mean the market for launch vehicles alone.

The broader space economy includes satellite manufacturing, communications, Earth observation, navigation, data services and other downstream businesses.

Launch is only one part of that ecosystem.

But it is a critical part.

Without reliable access to orbit, the rest of the space economy cannot scale.

That is also why the launch business is so difficult to enter. The technology is complex, the capital requirements are high and the consequences of failure are severe.

Those barriers limit the number of companies capable of providing reliable orbital launch services.

Skyroot says 70-80% of its potential market is global and mostly commercial. That is significant because the company's addressable market is not limited to India's still-developing domestic satellite industry.

Its customers could come from across the world.

The opportunity, therefore, is not to capture a large share of the entire $600 billion space economy.

It is to establish a position in one of the most difficult and strategically important parts of that ecosystem — putting satellites into orbit.

What happens after Vikram-1?

The immediate test is Mission Aagaman.

Vikram-1 will have to complete a complex orbital mission involving multiple stages, high speeds and precise navigation.

The launch is also the first of three planned test flights intended to validate the vehicle.

If Skyroot can establish reliability, the next challenge will be scale.

That means producing more rockets, launching them more frequently and maintaining reliability as the launch cadence increases.

The company's stated ambition is to move from a capacity of more than one rocket a month towards two rockets a month as it expands its infrastructure.

That is where the launch business starts to become a manufacturing and operations challenge.

A rocket company cannot remain commercially viable by successfully launching only once.

It must develop a repeatable system in which rockets can be built, tested, launched and, where applicable, recovered or replaced at a commercially sustainable cost.

The bigger question for India's private space sector

Vikram-1 is therefore more than a technology demonstration.

It is a test of whether India's private space sector can move from building prototypes to operating businesses.

Skyroot has already demonstrated that a private Indian company can design and build a rocket capable of reaching the edge of space.

The next challenge is far harder: reaching orbit reliably, doing it repeatedly and finding enough customers to make the economics work.

That is the real significance of Mission Aagaman.

The launch could mark the moment when India's private space story moves from “Can a private company build a rocket?” to a much bigger question:

Can an Indian private company become a reliable global launch provider?

Skyroot's answer begins with Vikram-1.

If the company succeeds, the next phase of India's space story may not be defined only by the missions launched by the government.

It could increasingly be defined by the rockets built, launched and operated by India's private sector.