Last updated: January 21, 2015 1:00 am
SpaceX has raised a new $1bn round of financing from Google and Fidelity that values Elon Musk’s rocket company at just over $10bn, it said on Tuesday.
The funding will fuel Mr Musk’s ultimate ambitions to colonise Mars, building on its current focus on reusable rockets. It will also provide capital for a new venture, building a network of communications satellites that can provide internet access to remote areas, an increasing priority for Google.
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“This funding will be used to support continued innovation in the areas of space transport, reusability and satellite manufacturing,” SpaceX said in a statement.
Together, Google and Fidelity own 10 per cent of the company following the deal. SpaceX’s existing backers, including Founders Fund and Draper Fisher Jurvetson, have also participated in the funding.
Don Harrison, Google’s vice-president of corporate development, will join SpaceX’s board as part of the deal, under which it is investing $900m for a 7.5 per cent stake.
That sum exceeds Google’s substantial investments last year in Uber, the car-hailing service, and Magic Leap, a virtual reality start-up, as it becomes more active in forming financial and strategic partnerships with other companies.
“Space-based applications, like imaging satellites, can help people more easily access important information, so we’re excited to support SpaceX’s growth as it develops new launch technologies,” Google said.
Google’s attempts to harness wireless internet capabilities delivered from the skies have included Project Loon, a prototype system using high-altitude balloons, and the acquisition of drone maker Titan Aerospace last April. Facebook is also experimenting with drones and satellites to bring internet access to remote areas.
Mr Musk announced SpaceX’s new satellite venture in Seattle on Friday, just days after a rival plan from former Google employee Greg Wyler’s OneWeb revealed an unspecified amount of funding from Sir Richard Branson’s Virgin Group and chipmaker Qualcomm.
Analysis: Space race
Start-ups and their funders shoot for the stars
A rush of new fundraising in the private space sector shows that investors are still prepared to back the start-ups behind the private space race if the potential reward is big enough.
The financing means that California-based SpaceX — short for Space Exploration Technologies Corporation — is the latest private technology company to achieve a valuation above $10bn in the past year, alongside Uber, Airbnb, Xiaomi, Snapchat and Dropbox.
Increased availability of private funding has meant that tech companies have been able to delay going public, something Mr Musk has said he is not keen to do because of SpaceX’s long-term goals.
SpaceX is one of only two suppliers — alongside Orbital Sciences Corporation — chosen in a competitive process to provide launch services to Nasa, the US space agency. The pair have broken the monopoly on US government launches that United Launch Alliance — a joint venture of Boeing and Lockheed Martin — had previously enjoyed.
Space-basedapplications, like imaging satellites, can help people more easily access important information, so we’re excited to support SpaceX’s growth as it develops new launch technologies
- Google
Nasa last year showed its confidence in SpaceX when it chose the company as one of two operators — alongside Boeing — to take US astronauts to the International Space Station from 2017 onwards.
However, SpaceX is under pressure to reduce the delays to its launch programme. The company is due this year to launch around one satellite every month and accepts that it has been running behind schedule.
The company is seeking to reduce the cost of launches by recovering the first-stage rockets that are normally allowed to drop into the Atlantic after launch. However, the first such attempt this month failed. It plans to make another test in the coming weeks.
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