When Will We See a SpaceX IPO?
The universe is a massive place. We live on planet earth in a galaxy where there are between 200-400 billion stars and at least 100 billion planets. This one galaxy we live in, we call the Milky Way. So how many galaxies are there just like ours? According to the space telescope Hubble, there are an estimated 100 billion galaxies in the universe. This is a massive expanse for mankind to explore. NASA has done a great job of taking a look at what’s out there, but hasn’t there been any interest from the corporate world to explore space? There is one venture backed private company that has stated their ultimate goal is to enable people to live on other planets. This company is called SpaceX and was founded by Elon Musk who has an almost cult-like following of investors who see him as the leading visionary today who is making things happen with his very successful forays into solar power (SolarCity) and electric vehicles (Tesla).
Founded in 2002, Space Exploration Ventures (SpaceX) has taken in an incredible $1.2 billion in funding so far from big players like Google, Fidelity, and Draper Fisher Jurvetson. What’s most interesting about this huge chunk of funding is that $1 billion of it was taken in one round, a late stage Series E funding round that closed in January 2015. Having grown to 4,000+ employees today, Elon Musk seeded SpaceX himself with $100 million in 2006 and serves as the current CEO and Chief Designer. SpaceX is now valued at 12 unicorns or $12 billion.
Update 02/16/2021: SpaceX has raised $850 million in additional funding raising their valuation to around $74 billion. This brings the company’s total funding to $6.3 billion to date.
Given the nature of their business, it’s easy to assume that SpaceX is a very capital intensive operation which is decades away from profitability. Remarkably, SpaceX states that they are profitable and cash flow positive. With over 50 launches on their manifest, they claim to have over $5 billion in contracts. One of these contracts is with NASA in the amount of $1.6 billion in which SpaceX will conduct at least 12 cargo resupply missions to the International Space Station with crew carrying missions in the “near future”.
SpaceX is developing three pieces of hardware to conduct space missions. The Falcon 9 is a two-stage rocket that propels payloads into space, with 19 successful launches to date. With nine engines, the Falcon 9 can sustain up to two engine shutdowns during flight and still successfully complete its mission. The optimal payload for the Falcon 9 is the SpaceX spacecraft called the Dragon.
A free-flying spacecraft designed to deliver both cargo and people to orbiting destinations, the Dragon made history in 2012 when it became the first commercial spacecraft in history to deliver cargo to the International Space Station and safely return cargo to Earth. SpaceX continues to innovate with the Falcon Heavy planned for lift off later this year, which will be the world’s most powerful rocket by a factor of 2.
SpaceX had negative press this year when one of their Falcon 9 rockets disintegrated shortly after launch. While this might be a detriment to “crew carrying missions in the near future”, it’s to be expected that there will be a few rockets crashed in pursuit of “zero defects” for space travel. NASA has managed to spend $526 billion from 1958 until 2011 and still hasn’t achieved “zero defect” space travel. It is to be expected that SpaceX will have some mishaps along the way.
Google (GOOG) has adopted the term “moonshot” for their most innovative projects. Given that definition, this “moonshot” called SpaceX is probably one of the most interesting startups we’ve seen. With the ability to close a $1 billion funding round this year, it doesn’t look like SpaceX is hurting for funds. It’s difficult to say if an IPO is in the cards anytime soon or if ever. If SpaceX looked to IPO, it would be a great opportunity for some publicity and an exciting venture to invest in, if only to be a part of such a grand ambition.
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