SpaceX, Valued at $30.5B, May Be Raising $500M for Its Satellite Business

Elon Musk’s SpaceX is aiming to raise $500 million at a $30.5 billion valuation with the help of Baillie Gifford, a 110-year-old Scottish investment firm that is also the biggest shareholder of Tesla.

According to The Wall Street Journal, which broke the story, the Hawthorne, California-based Space Exploration Technologies Corp. — better known as SpaceX — is raising capital from Baillie Gifford and existing shareholders. Baillie Gifford already owns about 7.6% of Tesla. Neither Musk nor Baillie Gifford representatives commented on the story.

The deal is expected to be announced before year-end. So far, SpaceX has undergone 17 rounds of funding, raising $2.2 billion. In a funding round in April, SpaceX was valued by investors at about $28 billion, and the stock price has gone up 10% since.

If the deal does go through, it will be another sign of Baillie Gifford’s trust in Musk, and consistent with its strategy of early investment in well-known tech stocks. The company’s portfolio includes Amazon, Alibaba, Baidu, Facebook and more, and its current stake in Tesla is worth about $4.6 billion.

“Most companies really don’t matter to long-run stock market outcomes,” Tom Slater, head of Baillie Gifford’s US equity investments, told Business Insider in October. “There’s just a small number that matter a huge amount. Our process is oriented around finding companies that could be those outliers. In order to do that, they’ve got to have a really big opportunity, they’ve got to have something unique about their ability to go after those opportunities, and it’s got to be under appreciated by the market. Those are fairly rare things.”

The reason for this round of funding is presumably the company’s satellite internet service, Starlink, which is designed to be powered by more than 4,000 satellites in low-Earth orbit. The project is expected to grow to a constellation of 11,000 satellites. In comparison, the largest telecom constellation as of today includes 65 satellites.

SpaceX recently made history by returning rocket boosters to Earth safely and then reusing them to launch more payloads. However, even if Starlink does move forward, it will take some years until the company sees revenue from the project.

Photo credit: SpaceX

Learn more on Asgardia.Space