from the that's-a-lot-of-raising dept.
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.
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 with about a 7.6% 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% 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 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, Mr. 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.
SpaceX, citing a need to get "leaner," said Friday it will lay off more than 10% of its roughly 6,000 employees.
[...] "To continue delivering for our customers and to succeed in developing interplanetary spacecraft and a global space-based internet, SpaceX must become a leaner company," the Hawthorne-based company said in a statement. "Either of these developments, even when attempted separately, have bankrupted other organizations. This means we must part ways with some talented and hardworking members of our team."
[...] SpaceX makes most of its money from commercial and national security satellite launches, as well as two NASA contracts, one a multibillion-dollar deal to deliver cargo to the International Space Station and the other up to $2.6 billion to develop a capsule that will deliver astronauts to the space station. The first launch of that capsule, without a crew, is planned for February.
The Elon Musk-led company has even more ambitious — and expensive — plans. Musk has said SpaceX will conduct a "hopper test" of its Mars spaceship prototype as early as next month. The production version of that spaceship and its rocket system is expected to cost billions.
Earlier this month, privately held SpaceX said it raised about $273 million in equity and other securities in an offering that sought to raise about $500 million, according to a filing with the Securities and Exchange Commission. The company is worth $31 billion, according to Equidate, which tracks private-company valuations.
There's an old adage about making something: "Good. Fast. Cheap. Pick two." Is SpaceX trying to pick all three?
In a reasonably predictable turn of events, SpaceX has been awarded a healthy $28.7M contract to study, develop, and test possible military applications of its prospective Starlink internet satellite constellation.
Previously reported by Teslarati in August 2018, FCC applications related to Starlink revealed that SpaceX had plans to develop and test Starlink interconnectivity with conformal antenna arrays installed on aircraft, all but directly pointing to military involvement with a reference to the need for aerial maneuvers "[representative] of a high-performance aircraft."
Around the same time as those FCC documents surfaced, the US Air Force Research Laboratory (AFRL) spoke with AviationWeek about plans to experiment with the potential capabilities offered by a flurry of proposed low Earth orbit (LEO) internet satellite constellations, including the likes of SpaceX's Starlink, OneWeb, a Telesat network, and others. While no specific companies were fingered in AFRL's public statements, it was far too convenient to be a coincidence. Four months later, the below transaction was published in the Department of Defense's running list of new contract awards:
"[SpaceX], Hawthorne, California, has been awarded a $28,713,994 competitive, firm-fixed-price ... agreement for experimentation ... in the areas of establishing connectivity [and] operational experimentation ... [and] will include connectivity demonstrations to Air Force ground sites and aircraft for experimental purposes. For the proposed Phase 2, the awardee proposes to perform experiments [with] early versions of a commercial space-to-space data relay service and mobile connectivity directly from space to aircraft." – Department of Defense, FBO FA8650-17-S-9300
Previously: FCC Authorizes SpaceX to Provide Broadband Satellite Services
SpaceX Starlink Satellite Prototypes Include Packed, Flexible Solar Arrays
SpaceX CEO Elon Musk Fired Managers and Employees in June to Shake Up Starlink Project
Elon Musk's SpaceX Is Raising $500 Million in Funding; Now Valued at $30.5 Billion