Elon Musk’s SpaceX raised $ 850 million to $ 419.99 per share

SpaceX completed another monstrous $ 850 million equity financing round last week, people familiar with the financing told CNBC, bringing the company’s valuation to about $ 74 billion.

The company raised the new funds at $ 419.99 a share, these people said – or just a penny below the $ 420 price that Elon Musk made infamous in 2018 when he said he had “guaranteed finance” to make Tesla private. .

The latest increase also represents a jump of about 60% in the company’s valuation from the previous round in August, when SpaceX raised close to $ 2 billion in a valuation of $ 46 billion.

SpaceX did not immediately respond to CNBC’s request for comment.

In addition to SpaceX building yet another war chest for its ambitious plans, existing company members and investors were able to sell an additional $ 750 million in a secondary transaction, one of the people said.

Notably, SpaceX raised only a portion of the financing available on the market, with a person telling CNBC that the company received an “insane demand” of about $ 6 billion in offers over just three days.

The most recent cash flow comes as SpaceX continues to develop two capital-intensive projects simultaneously.

Starlink is his ambitious project to build an internet network interconnected with thousands of satellites, known in the space industry as a constellation, designed to provide high-speed internet to consumers anywhere on the planet. SpaceX’s leadership previously estimated that Starlink will cost about $ 10 billion or more to build, but believes the network can generate up to $ 30 billion a year – or more than 10 times the annual revenue from its rocket business. existing.

SpaceX has so far launched more than 1,000 satellites for Starlink, while starting to launch the initial service in a public beta for customers in the US, Canada and the United Kingdom. Starlink service for $ 99. Pre-order messages inform users that SpaceX is “aiming for coverage in its area from mid to late 2021”, while other orders indicate 2022.

The company revealed in a Federal Communications Commission document last week that Starlink has “more than 10,000 users in the United States and abroad”, in just over three months since the public beta began.

Musk also reiterated last week that SpaceX plans to eventually separate Starlink and make it public. He said that Starlink “needs to go through a deep abyss of negative cash flow in the next year or so”.

“As soon as we can predict the cash flow reasonably well, Starlink will do the IPO,” said Musk.

SpaceX’s Starship rocket represents its other ambitious endeavor, with the company continually building and testing prototypes in Boca Chica, Texas. The company successfully launched several starship prototypes, landing them safely after short flights at about 500 feet above sea level. But its two most recent high-altitude flights, despite passing several development milestones, exploded with impact during landing attempts.

Starship prototypes are constructed of stainless steel, with the company’s goal of developing a rocket system that is reusable in the same way as a commercial aircraft. SpaceX is developing the Starship with the aim of launching loads and up to 100 people at a time on missions to the Moon and Mars.

Despite the explosive end of the last two flights, SpaceX saw the launches as a step forward in the development of the rocket. The next Starship prototype is in place on the company’s launch platform, with SpaceX scheduled to try another test flight in the coming weeks.

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