Private Equity Space Venture Capital

The Investors Lifting off With Space X

Space X is one of the highest valued private companies in America. Who is funding their operations to lift off?

Space X is one of the highest valued private companies in America. Who is funding their operations to lift off?

In their own words SpaceX┬ádesigns, manufactures and launches advanced rockets and spacecraft. The company was founded in 2002 to revolutionize space technology, with the goal of colonising Mars. This requires a serious amount of capital, and the return on investment has never been a certainty. As Elon Musk has revealed, his self-funding of Space X in the beginning provided 3 opportunities to launch the initial Falcon rocket – not the cheapest MVP ever imagined by a quasi-start-up, but potentially the most ROI driving MVP ever imagined, both from a financial perspective, and a dream-state perspective, allowing humanity to reimagine becoming a space-bearing civilisation is not an if, but when scenario.

Crunchbase sheds light on the funding rounds on private companies, and Space X has raised over $5 billion to date. Although an estimate, this holds up. In its latest funding round last year, Space X raised $1.9 billion, according to a regulatory filing which showed that 75 investors made equity investments in the launch company. SpaceX was also selling an additional $165 million in common stock, which Space News reported, would put the final amount of new funding at $2.07 billion.

This has been made possible by the phenomenal technical success of Space X, rather than hype and over-confidence in future potential success. In May 2020, Space X completed their first mission carrying NASA astronauts to the International Space Station, which was a culmination of the entire history of Space X showing that reusable rockets are possible and can be far more cost efficient than the incumbents who historically secure the valuable Government contracts.

This combination of reusability, success transporting astronauts, and the ability to make space accessible to smaller private companies requiring lower earth orbit for satellites has created a funding mecca as Space X is successfully delivering on the hype and dream state Musk promised. This has led to Venture Capital firms such as Manhattan Venture Partners and Legendary Ventures taking positions, NASA investing – as they certainly want to be a part of their own launch-vehicles’ future development, institutional behemoths such as Fidelity, and more left-field investors such as Ontario Teacher’s Pension Plan. The later shows the scale of financial success expected of Space X and gives everyone a sense that it is a secure investment. Whether it is or not, it is clear every style of investor, from early-stage, to a risk-averse Institutional outfit, is of the view that this private company’s success is a guaranteed lift off.

Sources:

TechCrunch: https://techcrunch.com/2020/08/18/spacex-raises-1-9-billion-in-largest-funding-found-to-date/

Space.com: https://www.space.com/spacex-raises-1.9-billion-funding-round.html

Space News: https://spacenews.com/spacex-raises-1-9-billion-in-equity/

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