The government on Thursday approved the setting up of a ₹1,000 crore venture capital for start-ups.

The fund will function under the aegis of Indian National Space Promotion and Authorization Centre (IN-SPACe) and will be operated along with Indian Space Research Organisation, information and broadcasting minister Ashwini Vaishnaw told reporters here.

The fund, approved by the Union cabinet, will invest in 30-35 space start-ups in two tranches — the first of ₹5-10 crore followed by ₹10-60 crore at a later stage.

The fund was announced by the finance minister n the budget.

The fund will focus on start-ups with proof of concept and commercialisation potential and is expected to drive innovation in satellite technology, launch vehicles and space applications, Vaishnaw said.

“We believe that this fund will not only be a key enabler for growth of the Indian space startup ecosystem but will also inspire investors to seriously look at this sector as an investment and come forward to become a part of the Indian space startup story,” A.K., director-general, Indian Space Association (ISpA), said.

Pixxel founder and CEO Awais Ahmed said: “This fund could be the launchpad for the next wave of space companies tackling everything from climate monitoring to satellite communications.”

An official statement said the deployment period of the ₹1,000 crore venture capital fund is planned to be up to five years from the actual date of start of the operations.

“The average deployment amount could be Rs 150-250 crore per year, depending on the investment opportunities and fund requirements,” the statement said.

“The fund aims to address the critical need for risk capital, as traditional lenders are hesitant to finance start-ups in this high-tech sector,” Vaishnaw said.