SpaceX seeking USD 730m raise to fund Starlink satellite project, sources say

05 December 2019

SpaceX, a privately owned rocket company founded by Elon Musk, is actively raising up to USD 730m in new capital to fund its Starlink constellation project, according to two sources familiar with the matter.
 
The Ontario Teachers’ Pension Plan (OTPP) is leading the raise, which will value SpaceX, also known as Space Exploration Technologies, at approximately USD 33.3bn, the first source said. Earlier this year, SpaceX raised USD 1.3bn in three oversubscribed tranches at the same valuation, the two sources said.
 
The first source said the funding round is expected to close in the next several weeks, which would bring the total amount of equity the company has raised since it was founded in 2002 to nearly USD 4bn.
 
SpaceX and OTPP did not return requests for comment.
 
OTPP also led a SpaceX raise of more than USD 300m over the summer in what was the inaugural investment for its Teachers Innovation Platform, which launched in April.
 
In addition to providing financing for Starlink, the new capital will be used to increase headcount at SpaceX, the first source said. The Starlink project is designed to consist of thousands of low-orbit satellites that would create an interconnected network to provide high-speed internet on Earth.
 
The Hawthorne, California-based company has received approval from the US Federal Communications Commission for a 12,000-satellite constellation. It recently requested permission to expand the project to include as many as 42,000 satellites.
 
SpaceX President Gwynne Shotwell has publicly said that Starlink will cost approximately USD 10bn to develop, and the company is aiming to offer Starlink broadband to users in the middle of 2020.
 
In a conference call with journalists in May, Musk said Starlink can become “economically viable” after launching 1,000 satellites and global coverage can be achieved with a few hundred satellites in orbit. So far, SpaceX has launched 120 satellites and it has a couple of dozen launches scheduled next year.
 
On 21 October, Musk claimed to have sent a tweet using the Starlink constellation.
 
A sector advisor said that it is not a surprise that SpaceX is so quickly raising such a large amount of capital, as “Musk has a philosophy of running his companies on the brink of breaking point.”
 
While SpaceX makes money on the Falcon 9 launches it does for NASA, the advisor said that it is not yet generating a lot of cash. The company is also putting money into its next-generation heavy Starship rocket, which is designed to send up to 100 passengers to the international space station, the moon and beyond, this advisor said.
 
Cooley provides legal advice to SpaceX, according to records on file with the California Department of Business Oversight.
 
by Troy Hooper and Andy Serbe in Los Angeles, with additional reporting by Mark Andress in San Francisco
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