June 17, 2019
Latest News
Science & Technology

Elon Musk's SpaceX is raising $500 million in funding

 Chief Executive Officer of SpaceX Elon Musk introduces the SpaceX Dragon 2 space craft at unveiling ceremony in Los Angeles, California, USA, May, 29 2014. EPA-EFE/PAUL BUCK

Chief Executive Officer of SpaceX Elon Musk introduces the SpaceX Dragon 2 space craft at unveiling ceremony in Los Angeles, California, USA, May, 29 2014. EPA-EFE/PAUL BUCK

Madrid, Dec 18 (efe-epa).- Elon Musk's rocket company, Space Exploration Technologies Corp., is set to raise $500 million at a $30.5 billion valuation, in a bid to help get its internet-service business off the ground, according to people familiar with the fundraising, a report from Dow Jones Newswires supplied to EFE on Tuesday said.

The Hawthorne, Calif., company, known as SpaceX, is raising the capital from existing shareholders and new investor Baillie Gifford & Co., one of the people said. The Scottish money-management firm is one of the largest investors in another Musk-led company, Tesla Inc., with about a 7.6 percent stake, according to S&P Global Market Intelligence.

SpaceX and the investors have agreed on the financing terms, but the money hasn't been sent to the company yet, this person said. SpaceX could announce the deal by year-end.

SpaceX was last valued by investors at about $28 billion in a funding round in April. The investors are paying $186 per share for new stock in the latest funding round, this person said. That is up about 10 percent from the $169-per-share paid during the April fundraising, according to SpaceX data compiled by private-company analytics firm Lagniappe Labs.

Including this round, SpaceX has raised about $2.5 billion of equity funding, according to Dow Jones VentureSource. Last month it raised $250 million via its first high-yield loan sale.

SpaceX and Baillie Gifford both declined to comment, added the Dow Jones report.

SpaceX plans to invest in the company's nascent satellite internet service, known as Starlink, one of the people said. Initial designs call for it to be powered by a constellation of more than 4,000 satellites orbiting the earth at low altitudes. That is one of two multibillion-dollar projects at the company, including plans to develop the largest rocket system ever built, the Starship and its Super Heavy rocket booster. The company currently makes money by launching commercial and government satellites.

SpaceX is among several companies where Musk is the largest shareholder. Aside from Tesla, where he is CEO, he also is the founder of brain computer startup Neuralink and tunnel-digging venture Boring Co., which is partly owned by SpaceX and on Tuesday is scheduled to reveal a test tunnel.

The fundraising rounds out a volatile year for Musk. His electric car company, Tesla, experienced production problems earlier this year and was weeks away from financial failure, Musk has said. The company has since overcome some of those issues and in October reported a record quarterly profit.

Musk was also accused of securities fraud by the Securities and Exchange Commission after tweeting in August that he was considering taking the auto maker private and had secured funding for such a deal, though none materialized. He settled with the SEC in September, and as part of that deal he relinquished his role as Tesla chairman in November. He remains Tesla's chief executive.

Musk also drew criticism from some investors and analysts for appearing to smoke marijuana in a live online interview in September. His erratic behavior hasn't seemed to shake the confidence of some private market investors.

SpaceX investors are optimistic about the potential of Starlink, according to a person familiar with their thinking. SpaceX projects the constellation could balloon to more than 11,000 satellites. The largest current telecommunications constellation has 65 satellites.

However, as at Tesla, Musk has a history of missing projections at SpaceX. In early 2016 SpaceX projected that it would launch 44 rockets this year, according to internal documents previously reported by The Wall Street Journal. On Tuesday, the company was scheduled to launch its 21st rocket but minutes before scheduled liftoff it was scrubbed for technical reasons and rescheduled for Wednesday.

Starlink is also behind the schedule laid out by SpaceX in other internal documents from fall 2015. Back then, SpaceX projected it would have 400 satellites in orbit by the end of this year. SpaceX has launched two prototype satellites, and company officials have said the first batch of operational satellites is slated to blast into orbit as soon as next year.

In 2015, SpaceX projected the internet business would require $3.5 billion of investment capital to launch the first 800 satellites and hire approximately 1,200 employees, among other costs. It projected the business would generate more than $30 billion in revenue by 2025, dwarfing its core rocket business revenue of around $5 billion.

SpaceX ultimately could need more than $10 billion in capital to reach its projected 11,000 satellite constellation, according to some industry estimates.

The company's rocket business has been growing steadily. It has executed 38 consecutive successful launches since a launchpad explosion in September 2016. Meantime it became the first company to return rocket boosters to earth safely and then routinely re-use them to launch subsequent payloads.

Development of the mammoth rocket and associated hardware remains an open question. Reasons range from changing designs to SpaceX's being shutout earlier this year from a U.S. Air Force competition that awarded more than $2 billion in contracts to three other rocket makers to develop various smaller boosters.

SpaceX's existing business faces headwinds. It expects to see declines in launches of its workhorse Falcon 9 rocket for 2019 and perhaps 2020. Global demand for launching commercial satellites, its core business, is stagnant, with some satellite manufacturers and customers looking to permanently exit the market segment.

In the US government arena, SpaceX is just beginning to see its Pentagon and NASA business ramp up. But it will likely take several years to gain substantial revenue from the deals, added the Dow Jones report.

By Rolfe Winkler, Andy Pasztor and Rob Copeland

News history
China biotech companies poach US talent

Hong Kong (China) Jun 17 (efe-epa).- China-based biotechnology startups looking to go global are poaching talent from the biggest American pharmaceutical...

Neurobiologist: Former athletes make best commentators

Concepcion M. Moreno

India aims to have its own space station

New Delhi, Jun 13 (efe-epa).- India announced Thursday it plans to put its own space station into orbit in the near future and has other projects in the...

India to launch its second lunar mission in July

New Delhi, Jun 12 (efe-epa).- India is set to launch its second lunar mission in mid-July to explore the south pole of the lunar surface, the country’s...

Animal fossils between 10,000-14,000 years old found in central Mexico

Puebla, Mexico, Jun 11 (efe-epa).- Fossil remains of mammoths, camels and gigantic "wolf-dogs" from 10,000 to 14,000 years ago have been found during work...

Russia, Spain make progress on development of UV telescope to Hubble

By Ignacio Ortega

What's next in payments

By Stella Yifan Xie

Halal surfing: Web browser targets 1.8 billion Muslim followers

By Noel Caballero

Cutting edge Chilean technology uses microalgae to curb air pollution

By Imane Rachidi

Washington museum to display real T-rex skeleton

Washington, Jun 4 (efe-epa).- The National Museum of Natural History in Washington DC on the weekend will open its renovated fossil and dinosaur hall with a...

The hurricane that changed US history

By Alvaro Blanco

China and its revolution of robots in production chains

By Paula Escalada Medrano

Chile creating marine algae paper to preserve fruit exports

Santiago, May 27 (efe-epa).- A "bioactive algal paper" that preserves food longer, especially fresh fruit exports, has been created in Chile using natural...

Experts stress using digital tools to make Colombian companies more dynamic

Cali, Colombia, May 23 (efe-epa).- Increasing human beings' use of digital tools is the vehicle whereby Colombia's business sector will develop, several...

Brazil reintroducing animal species into world's largest urban forest

By Carlos A. Moreno

Almaty, Kazakhstan, May 17 (efe-epa).- Springtime takes on a special meaning along the foothills of the Alatau mountains surrounding the southern Kazakh...

Blood & Truth, PlayStation VR makes you an action hero

By Paula Baena Velasco

Satellite images suggest deforestation decreasing in Latin America

By Gonzalo Sánchez

Toyota, Panasonic announce new joint venture to develop smart homes

Tokyo, May 9 (efe-epa).- Japan’s car maker Toyota Motor and technology giant Panasonic announced on Thursday that they would set up a joint venture to...

Robots, artificial intelligence serve guests at China's hotel of the future

By Paula Escalada Medrano.

Noise pollution threatens Chile's whales

By Patricia Lopez Rossell

Vietnamese teenagers hoping to clean air with bicycle invention

By Eric San Juan

Mexican researcher heads int'l project on globular clusters

Mexico City, May 5 (efe-epa).- Rosa Amelia Gonzalez Lopezlira, a researcher with the National Autonomous University of Mexico (UNAM), headed an...

Scientists find water in Itokawa asteroid samples

Washington, May 1 (efe-epa).- A group of researchers at Arizona State University has found water in samples collected from the surface of the asteroid...

I agree Welcome to news4europe.eu. We use cookies to improve your online experience. Find out more.