India's EtherealX puts $5M seed toward fully reusable launch vehicles

EtherealX, an Indian space startup, has raised $5 million in a seed funding round as it plans to develop fully reusable medium-lift launch vehicles, making satellite launches cost-effective and time-efficient.

Space launches have multiplied in recent years. However, despite the number of players, launches still involve substantial transportation costs and considerable waiting periods. For instance, SpaceX launches are booked until 2026, even while on a ride-sharing model.

EtherealX aims to solve this problem with a new fully reusable medium-lift vehicle, offering absolute reusability to help reduce transportation costs and cut launch timeframes. Unlike SpaceX’s Falcon 9, which provides partial reusability by bringing its booster back to Earth after successful launches, EtherealX is designing its vehicles to get both the upper stage and booster back.

Founded in 2022 by Manu J. Nair (CEO), along with former Indian Space Research Organisation (ISRO) scientist Shubhayu Sardar (COO) and aerospace engineer Prashant Sharma (CTO), the Bengaluru-headquartered startup intends to take on SpaceX with its medium-lift vehicle named Razor Crest Mk-1. In a fully reusable configuration, the design is intended to put 8 tons into the lower Earth orbit. The vehicle could also put over 24.8 tons into the lower Earth orbit in an expendable and 22.8 tons in a partially reusable configuration. They claim it can also deliver payloads in geostationary transfer and trans-lunar injection orbits.

“When bringing back the upper stages, the reentry heat is so much that the refurbishment cost is almost always more than the fresh vehicle itself. So, we built from scratch a completely new rocket engine cycle, which, coupled with the deployment system, allows us to operate our engines efficiently in both vacuum and atmosphere,” said Nair in an interview.

The startup claims that it can operate between $350 and $2,000 per kilogram, a fraction of what launch vehicles, including Falcon 9, currently offer and 1/35th of the global average launch price.

“At the price point at which we will enter the market, we’ll comfortably capture 30-40% of it,” Nair told TechCrunch.

The two-year-old startup has acquired 16 acres of land in Tamil Nadu, where it is developing what it says is India’s largest privately developed rocket engine facility.

What’s the approach for complete reusability?

Unlike conventional methodologies for fending off the reentry heat, such as heat tiles and other thermal protection systems, Nair explained to TechCrunch that EtherealX’s proprietary rocket engine cycle works along with a deployment system to redirect the reentry heat throughout the reentry phase. This helps the system to operate efficiently in both vacuum and atmosphere and allows the startup to achieve pinpoint landing as opposed to the traditional ballistic reentry, which requires a much larger range of target landing zones.

“The closest model to our approach could be SpaceX’s Starship. They’re attempting to bring the upper stage back, but they’re doing it with the usage of heat shields or tiles,” the executive said. “We’re not fighting the reentry heat.”

The startup declined to provide too many details on the record so it can test in secrecy.

Currently, EtherealX does not produce the rocket engine in-house to avoid manufacturing-related capital expenditures and has partnered with a few companies to outsource its production. However, it does have plans to manufacture the rocket over time.

“During the rocket’s development, we need to observe the most effective way of manufacturing these components so that we can establish a proper manufacturing facility, which will be tested in-house,” said Nair.

EtherealX aims to test its development through a technology demonstrator vehicle (TDV), which it plans to launch in 2026. The company told TechCrunch that the startup plans for a full orbital launch to around 400 kilometers with its initial vehicle, using the same engine type as the full-scale vehicle but in a smaller count: four engines on the upper stage and one in the booster stage.

The TDV will be 35 meters tall and 2.5 meters wide with a 1.2-ton capacity.

The co-founder told TechCrunch that it is going with the TDV launch first to verify the telemetry and flight software for its commercial launch later.

Meanwhile, the startup has already identified 35 potential customers for its 2026 launch, though it plans to go ahead with 10–15 customers initially.

India’s space ecosystem has grown significantly. The South Asian nation is home to 229 space tech startups, per the Indian government data, and the ecosystem already has players building small satellite launch vehicles and solutions to offer space situational awareness and hyperspectral imagery.

The Indian government projects that the country will raise its share in the global space ecosystem fourfold by 2030. In the last few months, New Delhi introduced its space policy and updated rules to attract foreign investors and companies. The country also gained global attention for events, including its successful moon landing and partnership with NASA for joining Artemis Accords.

In 2023, space tech investments in India hit $126 million, up 7% from the $118 million raised in 2022 and a 235% increase from the $37.6 million in 2021, per Tracxn. The funding landscape has so far been driven by early-stage investments as the ecosystem is yet to be matured for commercial activities.

EtherealX’s seed funding round, led by Indian deep tech fund YourNest, also included BIG Capital, BlueHill Capital, Campus Fund, SGgrow and Golden Sparrow Ventures.

The startup plans to use its fresh funds to kick off engine test firing in the next six months and set the pitch for its TDV launch in a couple of years. It also aims to finish building its engine test facility and manufacturing the 40-kilonewton and 925-kilonewton engines.