SpaceX raises $850 million in recent funding

Elon Musks space travel company SpaceX recently completed a raise of $850 million placing the company’s valuation at nearly $74 billion, sources familiar with the matter told CNBC.

SpaceX raised the new funds at $419.99 per share, a cent below the infamous 2018 funding of $420 a share when Musk declared that he had adequate funding to take Tesla private, the sources said.

The new fundraise signifies a 60% increase in the company’s valuation from the preceding round in August when the space travel company raised nearly $2 billion with a valuation of $46 billion.

One of the sources said SpaceX insiders and existing investors were able to sell an additional $750 million in a secondary transaction, making it possible for the company to further fund its large plans. Although the company only raised a portion of the funding, one of the sources told CNBC that SpaceX received “insane demand” of nearly $6 billion on offers within three days.

As investors pour money into the space travel company, it focuses more on simultaneously developing two capital-intensive projects: Starlink and its space travel project.

Starlinks is SpaceX’s super-ambitious project to build an interconnected internet network with thousands of satellites in space. It is known as a “constellation” and is designed to deliver high-speed internet to consumers in any part of the planet. The company leadership estimates that it would cost about $10 billion or more to build Starlink, but believe that the cost-intensive project can bring in as much as $30 billion each year, or 10 times the annual revenue of its rocket business.

The space company has so far launched more than 1,000 Starlink satellites and has begun to roll out early service in public beta to consumers in the U.S., U.K., and Canada. The scope has since been widened and prospective users can preorder Starlink service at $99. Some preorder messages tell customers that SpaceX is “targeting coverage in your areas in mid to late 2021,” while others state 2022.

In a Federal Communications Commission filing last week, SpaceX disclosed that Starlink has “over 10,000 users in the United States and abroad,” in just three months of rolling out its public beta.

Musk also mentioned last week that a spin-off for SpaceX was in consideration. He said Starlink “needs to pass through a deep chasm of negative cash flow over the next year or so.” Adding that as soon as they can “predict cash flow reasonably well, Starlink will IPO.”

In a tweet on Twitter earlier this month, Musk said “Starlink is staggeringly difficult technical & economic endeavor. However, if we don’t fail, the cost to end-users will improve every year.”