SpaceX Raised Even More Cash Than Initially Thought in February
Elon Musk’s reusable rocket company SpaceX conducted an equity funding round back in February, and it turns out that SpaceX was able to raise even more capital than initially believed. The news comes as SpaceX continues to deploy Starlink satellites as part of its ambitious goal of creating a constellation of satellites capable of beaming broadband internet back down to Earth.
Here’s how much SpaceX just added to its war chest.
An Extra $314 Million
A regulatory filing with the SEC filed in February showed that SpaceX had raised approximately $850 million in fresh equity capital, but an amended version that was filed this week showed that the company actually ended up raising $1.16 billion. That translates into a difference of roughly $314.1 million in additional cash.
CNBC previously reported that the funding round fetched SpaceX a $74 billion valuation, making it one of the most valuable private startups in the world. Only TikTok parent ByteDance and hot fintech Stripe command higher valuations at $140 billion and $95 billion, respectively, according to CB Insights. Chinese ride-sharing juggernaut Didi Chuxing, which is preparing to go public through a traditional IPO, is worth around $62 billion.
Why Investors Want In on SpaceX so Badly
The new disclosure shows that the funding round in February enjoyed robust demand from private investors and was likely oversubscribed. Investors have been clamoring to scoop up SpaceX shares in the private market as the company continues to develop its Starship that Musk hopes will one day ferry humans between planets.
SpaceX conducted a Starship test last month, launching the interplanetary vehicle prototype, although the spacecraft missed its landing and exploded in typical spectacular fashion. An upgraded Starship prototype dubbed SN15 is now being prepared for the next test flight. The latest version has “hundreds of design improvements” across various subsystems, according to Musk.
While missions to Mars are still years away, the Starlink initiative is closer to reality. The network is already up and running, with SpaceX currently offering satellite internet to beta testers. In an effort to spur adoption, SpaceX is selling the necessary dish to customers at a loss.
Starlink customers pay around $500 for the satellite dish that is required to receive signals, even though the dish costs SpaceX an estimated $1,500 to manufacture. However, costs are rapidly declining—the equipment initially cost around $3,000 per unit—which should soon mitigate the upfront losses. More importantly, Starlink subscribers pay about $100 per month for the service, which also helps SpaceX recoup any losses over time.
Musk has also confirmed that Starlink will eventually go public at some point in the future, although it may not be until the business is generating stable financial results and predictable cash flow. The eccentric billionaire committed to helping ensure that retail investors get “top priority” in investing in SpaceX when the time comes.
Traditional IPOs are often criticized for favoring large institutional investors while neglecting retail investors, which has contributed to the rise of alternatives like special purpose acquisition companies (SPACs) and direct listings. It’s unclear what route Starlink may take.
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