SpaceX is on track to become the world’s third most valuable private company if it successfully raises a new round of funding.
First reported and confirmed by CNBC, SpaceX hopes to raise between $ 500 million and $ 1 billion through a new investment offering. The Series N round would ultimately value the company at $ 44 billion, second only to China’s Didi and Bytedance (known in the US for TikTok), if SpaceX finds significant investor interest at the price. of $ 270 shares. Based on ~ $ 3.4 billion that SpaceX has raised in more than a dozen rounds in recent years, strong investor demand is almost guaranteed.
Investor confidence and interest can be largely explained by SpaceX’s spectacular success in dealing with countless systemic and technological challenges, as well as its association with Tesla founder and CEO Elon Musk. Perhaps even more at odds with success than SpaceX’s short-term goals, Tesla’s meteoric rise, and iron dominance in the global consumer electric vehicle industry have helped, unsurprisingly, convince many that success is often only a matter of time for Musk’s calculated companies.
Like several recent rounds of fundraising, SpaceX is seeking investors willing to support the company’s long-term vision in the hope that its Starship and Starlink programs are as disruptive and revolutionary as they claim to be. CNBC reports that SpaceX is telling potential investors that Starlink aims to become a major player in a variety of industries with a potential global market of more than $ 1 trillion per year. That figure is almost certainly a theoretical best-case value, assuming that SpaceX has completed a vast Starlink constellation of ~ 40,000 satellites and is capable of capturing almost all potential customers.
However, it is still within the realm of possibility. On its own, Starlink has the potential to become one of the world’s largest companies, public or private, if SpaceX achieves every ambitious goal it has set for itself. In that context, there is a chance that acquiring a stake in SpaceX at a valuation of ~ $ 44 billion will set unprecedented returns for Tesla investors buying shares for $ 100-200 in the early 2010s.
Of course, that investment logic doesn’t even touch Starship, other than the fact that Starship will be a necessity if SpaceX has any chance to launch and maintain a constellation of tens of thousands of satellites. Beyond the integral role of the Starship / Super Heavy launch vehicle in Starlink’s future plans, the next-generation rocket is arguably a much trickier technical challenge than Starlink, while offering far less certainty of return on investment (ROI). ). Relative to other industries, particularly those with demand for communications services, the global demand for commercial launch services is minuscule, representing only a few billion dollars per year.
Even if Falcon 9, let alone Starship, dramatically reduces the cost of access to orbit, there is no guarantee beyond basic economic theory that lowering the barrier of entry will necessarily expand the market for launches. For a radical expansion of demand, completely new industries will have to be created adjacent to space, since the vast majority of modern demand comes from space-based communications companies.
However, SpaceX has known that this would be the case for at least half a decade and is therefore intelligently positioning Starlink as the primary focus of investors when it comes to revenue and earnings. Starlink would thus help SpaceX complete the spacecraft launch vehicle, which is much more focused on the company’s fundamental goal of making humanity a multi-planet species by enabling the creation of a self-sufficient city on Mars. Still, Starship will need to be revolutionary affordable, reliable, and reusable for SpaceX to dream of achieving that founding goal.
In the process of addressing those technical challenges, Starship could expand the global space industry by one or more magnitudes, but it will remain a huge wild card until the day it does.
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