SpaceX in preliminary negotiations for another big fundraising round
Capitalism in space: According to this report, SpaceX is now in preliminary negotiations with investors prior to beginning another big fundraising round, even though the company just raised $1.9 billion in private investment capital in August.
The talks are still in early phases, and exact pricing for the fundraising round has not yet been determined, one of the people said. Terms could still change, and it could take several weeks to decide and firm up allocations, the person added. SpaceX also may not be able to convince investors to give it the lofty valuation it desires. Allocations refer to which investors will be authorized to buy shares and how much they will pay for those shares.
“It’s a pretty big shock to me, honestly,” one of the people said. “What company jumps to double its valuation in six months? I don’t care at what scale you’re operating, it’s kind of crazy,” they added. “If you look at the series, every single valuation is a 10 to 20% bump.”
It appears that the company is trying to leverage its successes with Dragon, Starship, and Starlink to obtain more funding. The story also suggests that SpaceX now has a better sense of what it will cost to get Starship built, and thus is looking to obtain those funds now, when they are in a good position to get them.
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Capitalism in space: According to this report, SpaceX is now in preliminary negotiations with investors prior to beginning another big fundraising round, even though the company just raised $1.9 billion in private investment capital in August.
The talks are still in early phases, and exact pricing for the fundraising round has not yet been determined, one of the people said. Terms could still change, and it could take several weeks to decide and firm up allocations, the person added. SpaceX also may not be able to convince investors to give it the lofty valuation it desires. Allocations refer to which investors will be authorized to buy shares and how much they will pay for those shares.
“It’s a pretty big shock to me, honestly,” one of the people said. “What company jumps to double its valuation in six months? I don’t care at what scale you’re operating, it’s kind of crazy,” they added. “If you look at the series, every single valuation is a 10 to 20% bump.”
It appears that the company is trying to leverage its successes with Dragon, Starship, and Starlink to obtain more funding. The story also suggests that SpaceX now has a better sense of what it will cost to get Starship built, and thus is looking to obtain those funds now, when they are in a good position to get them.
The support of my readers through the years has given me the freedom and ability to analyze objectively the ongoing renaissance in space, as well as the cultural changes -- for good or ill -- that are happening across America. Four years ago, just before the 2020 election I wrote that Joe Biden's mental health was suspect. Only in this year has the propaganda mainstream media decided to recognize that basic fact.
Fourteen years ago I wrote that SLS and Orion were a bad ideas, a waste of money, would be years behind schedule, and better replaced by commercial private enterprise. Even today NASA and Congress refuse to recognize this reality.
In 2020 when the world panicked over COVID I wrote that the panic was unnecessary, that the virus was apparently simply a variation of the flu, that masks were not simply pointless but if worn incorrectly were a health threat, that the lockdowns were a disaster and did nothing to stop the spread of COVID. Only in the past year have some of our so-called experts in the health field have begun to recognize these facts.
Your help allows me to do this kind of intelligent analysis. I take no advertising or sponsors, so my reporting isn't influenced by donations by established space or drug companies. Instead, I rely entirely on donations and subscriptions from my readers, which gives me the freedom to write what I think, unencumbered by outside influences.
Please consider supporting my work here at Behind the Black.
You can support me either by giving a one-time contribution or a regular subscription. There are five ways of doing so:
1. Zelle: This is the only internet method that charges no fees. All you have to do is use the Zelle link at your internet bank and give my name and email address (zimmerman at nasw dot org). What you donate is what I get.
2. Patreon: Go to my website there and pick one of five monthly subscription amounts, or by making a one-time donation.
3. A Paypal Donation:
5. Donate by check, payable to Robert Zimmerman and mailed to
Behind The Black
c/o Robert Zimmerman
P.O.Box 1262
Cortaro, AZ 85652
You can also support me by buying one of my books, as noted in the boxes interspersed throughout the webpage or shown in the menu above. And if you buy the books through the ebookit links, I get a larger cut and I get it sooner.
The interesting thing about these SpaceX funding drives is how much it pulls away from other space development companies, especially the small ones. Why bet on a seed round company when you can get in on a SpaceX deal? I applaud their work but the funding market needs to grow too as these big deals choke out the small ones.
Is the funding really dramatically different from the Blue Origin levels of funding? Considering what SpaceX achieves versus Blue Origin the funding doesn’t seem too outrageous. SpaceX appears to be actually making money from various income streams.
jburn: My impression is that even with these additional funds, the additional investment capital funding that SpaceX is getting barely matches what Jeff Bezos has raised in selling his Amazon stock. Considering how much more SpaceX has gotten done, including making money, a comparison with Blue Origin is downright embarrassing for the latter.
As with Tesla’s recent equity sale, SpaceX is striking while the iron is hot. 2020 has been a very good year for SpaceX. 2021 could well prove significantly better.
Joe asked: “Why bet on a seed round company when you can get in on a SpaceX deal?”
The venture capitalists who do not have the billion-dollar funds that SpaceX is looking for are the ones that bet on the smaller companies and projects. SpaceX is looking for investors who are not going to interfere, who are willing to be silent investors, or relatively so, even though they are putting up huge sums of money.
A small startup company needs to look for funding from those who fund small startup companies. This is a very specialized market that the billion-dollar guys do not want to spend the resources on. The small startups take a lot of nursing and attention, not silent investors.