SpaceX

SpaceX is the world’s most successful private space technology company, developing rockets, spacecraft, satellites, and communications systems.

The company has its spaceport in the US state of Texas and has already carried out the first commercial launch of a crew to the ISS.

Official website: https://www.spacex.com/

HQ: Hawthorne, US

Why invest in SpaceX?

The most successful private space technology company

Prospects of Starlink IPO in 2025-26

SpaceX is the main beneficiary of the growing SpaceTech market

Financial metrics of SpaceX

• Total funding: $10 billion
• Last round: $250 million
• Last round valuation: $127 billion
• Last round stock price: $70
• Last round date: July 2022
• Key Investors: Alphabet (Google), Fidelity, Draper Fisher Jurvetson, Valor Equity Partners, CapriconInvestment Group, Baillie Gifford, Craft Ventures, Founders Fund, NASA

About the company

SpaceX is the world’s most successful private space technology company, developing rockets, spacecraft, satellites, and communications systems.

The company has its spaceport in the US state of Texas and has already carried out the first commercial launch of a crew to the ISS.

To date, SpaceX has conducted 189 launches, 125 of them using reusable rockets. For 2022, the company plans to complete 52 launches — a record number compared to 31 last year.

In November, SpaceX launched the Falcon Heavy super-heavy reusable rocket for the first time after a 3-year break with cargo for the US Space Force.

The first orbital flight of the Starship, which could be used to colonize Mars in the future, is scheduled for early December.

Starlink

Starlink is a global satellite system. As of September 2022, it consists of more than 2,700 serial small satellites in low Earth orbit. It is planned to deploy about 12,000 satellites, possibly increasing to 42,000.

Starlink provides Internet access to more than 500,000 users in 32 countries as of July 2022. The company has already produced more than 1 million Starlink terminals.

At the end of May, the company received a license to operate in Nigeria and Mozambique, which gave the service access to Africa. As Elon Musk announced on his Twitter, the Internet from Starlink has started working on all six continents, including Antarctica.

The Federal Communications Commission in the United States has authorized the use of satellite Internet from Starlink on moving vehicles, including aircraft, ships, and cars. This gives the company access to various potential business customers: logistics companies, airlines, cruise companies, etc.

One of the world’s two most famous cruise lines, Royal Caribbean Group, plans to offer Starlink service on 50 ships by March 2023. Hawaiian Airlines has been awarded a contract to provide Starlink services on flights to and from Hawaii in 2023.

Market prospects

In 2021, the global space technology market was valued at $386 billion, according to BryceTech. At the same time, 72% of this market falls on satellites.

Space launch market services alone are valued at $16.9 billion in 2022 and are projected to reach $29.6 billion by 2027 at a CAGR of 15.1% over the forecast period.

Over the past 10 years, investment in space startups has grown from hundreds of thousands of dollars to $15.4 billion — the same amount invested in space tech last year by all types of investors, from venture capital funds to corporations and public offerings.

Venture investors increase the amount of invested capital, the number of deals and the average round size are growing. At the same time, more than half of investors invested in the space tech industry for the first time last year, which shows a steadily increasing interest in the industry.

SpaceX is the primary beneficiary of the growth of the space tech market, just as Google was the primary beneficiary of the development of the Internet market and Apple of the smartphone market.

Financial performance of SpaceX

In 2022, SpaceX raised nearly $2 billion in funding, $1.7 billion in May, and another $250 million in July. Its valuation exceeded $127 billion. It officially became the most valuable private company in the United States.

SpaceX expects annual revenue by 2025:

• to reach $5 billion from space launches,
• exceed $30 billion from the satellite constellation.

SpaceX works closely with NASA and the US government, earning on government contracts, which is a stable source of revenue in any economic condition.

In 2021, the company won a $2.9 billion NASA tender to develop a lunar lander. The company also delivers cargo and people to the ISS and puts cargo into orbit for the US Space Force.

In September 2022, SpaceX received a contract worth over $1.4 billion from NASA for five additional flights to the ISS until 2030. In December 2020, SpaceX won a tender from the US Federal Communications Commission to deploy high-speed Internet in rural areas of the country.

SpaceX leads the commercial rocket launch market, delivering payloads for various companies. Thanks to reusable rockets, SpaceX offers more competitive prices for delivering 1 pound of cargo to Earth orbit — about $1297.

SpaceX’ founders and management

Elon Musk — the founder and CEO. 

One of the most famous and wealthiest people in the world. He also owns Tesla, Neuralink, The Boring Company, and Twitter.

Gwynn Shotwell is President and COO and has been with the company for 20 years and included in the list of “The most powerful women in the world,” according to Forbes.

Bret Johnsen is the Chief Financial Officer and President of Acquisitions. Before joining SpaceX, he was CFO at Mindspeed Technologies.

Tim Hughes is Senior Vice President. Before joining SpaceX, he served as the chief advisor to the US Science and Technology Committee.

Risks of investing in SpaceX

Regulatory risks.  The US Federal Communications Commission has yet to permit SpaceX to launch another 30,000 Starlink satellites. Now the company has permission for 12 thousand. The company also depends on regulators’ decisions on the admission of Starlink in different countries.

The risk of negative reputational impact in the event of a missile crash. 

Engineering risks concerning technologies that have not yet been created.

Exit strategy

IPO Starlink

Elon Musk has repeatedly stated that he intends to spin off Starlink into a separate company and conduct its IPO. Musk said at a meeting of SpaceX employees in July this year that the likely date for going public is 2025-26. 

Investors in SpaceX will receive Starlink shares and still own SpaceX shares. Starlink’s valuation, with projected revenue of $30 billion, could be over $300B.

Sale on the secondary market

SpaceX shares are in high demand among investors in the secondary market. Since 2019, their value has increased by 300%.

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