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January
03
2023

The Fed needs to jack rates up by 10% right now
Robin Wigglesworth

A SpaceX Falcon 9 rocket carrying a batch of Starlink satellites as it launches from Cape Canaveral Space Force Station on Dec 28, 2022.

This is nuts, we thought there was a crash?

From CNBC overnight:

Elon Musk’s re-usable rocket maker and satellite internet company, SpaceX, is raising $750 million in a new round of funding that values the company at $137 billion, according to correspondence obtained by CNBC.

Last month, Bloomberg first reported that SpaceX was allowing insiders to sell at $77 per share, which would have put the company’s valuation near $140 billion. The company raised more than $2 billion in 2022, including a $250 million round in July, and was valued at $127 billion during an equity round in May, CNBC previously reported.

According to an e-mail sent to prospective SpaceX investors, Andreessen Horowitz (also known as a16z) will likely lead the new funding round. Early SpaceX investors included Founders Fund, Sequoia, Gigafund and many others.

$137 yards! That’s a valuation greater than Salesforce, Netflix, AT&T, Unilever, IBM, HSBC, Caterpillar and Lockheed Martin. 

For an apparently unprofitable company with thus-far modest revenues and growth trajectory (Jefferies estimated sales at $2bn in 2018 and this industry analyst put it at about $3.2bn in 2022). And judging from SpaceX’s prodigious fundraising (now about $10bn) it seems to be burning through roughly $1bn a year?

For reference, here’s the market capitalisation of Virgin Galactic, another space company that went public through a Spac in late 2019. 

Basically, it’s a good day for Matt Levine’s Elon Markets Hypothesis. 

But we’re sure that the good folk at Andreessen Horowitz, Sequoia and Founders Fund have done exhaustive due diligence and been disciplined in their capital allocation.

 

 

  

Robin Wigglesworth is Alphaville editor. 

He was previously the FT's global finance correspondent, US markets editor, deputy head of fastFT, capital markets correspondent, and Gulf correspondent.

 

 

 

www.ft.com