Author Topic: SpaceX fundraising again  (Read 29193 times)

Offline yg1968

  • Senior Member
  • *****
  • Posts: 17267
  • Liked: 7123
  • Likes Given: 3065
Re: SpaceX fundraising again
« Reply #20 on: 08/19/2014 06:01 pm »
Yeah, if you're trying to value a company you look at actual revenue, not promises of customers (bookings) or one-off deals that they have no hope of repeating. So far, SpaceX hasn't had any reliable revenue, and that's probably why they're off raising money again.

They are more than just bookings. They are contracts. Furthermore, SpaceX probably gets paid on a percentage of completion method (or something similar).

Offline QuantumG

  • Senior Member
  • *****
  • Posts: 9238
  • Australia
  • Liked: 4477
  • Likes Given: 1108
Re: SpaceX fundraising again
« Reply #21 on: 08/19/2014 06:04 pm »
Yeah, if you're trying to value a company you look at actual revenue, not promises of customers (bookings) or one-off deals that they have no hope of repeating. So far, SpaceX hasn't had any reliable revenue, and that's probably why they're off raising money again.

They are more than just bookings. They are contracts. Furthermore, SpaceX probably gets paid on a percentage of completion method (or something similar).

A rational investor would call them bookings. There's no recognizable timeline for receiving the full account and perpetual slips are the norm.
Human spaceflight is basically just LARPing now.

Online abaddon

  • Senior Member
  • *****
  • Posts: 3051
  • Liked: 3900
  • Likes Given: 5274
Re: SpaceX fundraising again
« Reply #22 on: 08/19/2014 06:49 pm »
They make $57 million in sales for each flight.

They haven't sold a single launch for that price, yet.

Technically no, but it's getting awfully close:

Quote
Sat ops Econ 101 re: SpaceX. AsiaSat 8 launch cost AsiaSat $52.2M. Same sat on ILS Proton: $107M. Even w/ delays, the calculus is simple.

https://twitter.com/pbdes/status/496640752215023616

Offline QuantumG

  • Senior Member
  • *****
  • Posts: 9238
  • Australia
  • Liked: 4477
  • Likes Given: 1108
Re: SpaceX fundraising again
« Reply #23 on: 08/19/2014 06:55 pm »
Technically no, but it's getting awfully close

Fair enough. I'd even say that's reasonable to count. So you're talking a ~$500M valuation.. maybe even ~$1B if you squint.. but not $10B. Maybe in a few years time, if they focus on sales and don't go off on another retooling adventure, but not now.



Human spaceflight is basically just LARPing now.

Offline wannamoonbase

  • Elite Veteran
  • Senior Member
  • *****
  • Posts: 5413
  • Denver, CO
    • U.S. Metric Association
  • Liked: 3113
  • Likes Given: 3862
Re: SpaceX fundraising again
« Reply #24 on: 08/19/2014 06:57 pm »
...but the profit numbers, as far as I know, have not been released.

That's because there is no profit.

There is no way that SpaceX is profitable on anything at this point.  Need more launches, not at discount for that to happen.

Edit: But I do think that SpaceX is a great example of the commercial initiative by NASA working.  The NASA contracts are obviously the money that has driven much of SpaceX's development.  They have leveraged a few hundred million to produce a viable company for a fraction of the cost of doing it themselves.  There is a now a company worth $10B and NASA has put out less than $1B to this point. 
« Last Edit: 08/19/2014 07:06 pm by wannamoonbase »
Wildly optimistic prediction, Superheavy recovery on IFT-4 or IFT-5

Offline kirghizstan

  • Full Member
  • ****
  • Posts: 671
  • Liked: 179
  • Likes Given: 86
Re: SpaceX fundraising again
« Reply #25 on: 08/19/2014 07:01 pm »
...but the profit numbers, as far as I know, have not been released.

That's because there is no profit.

There is no way that SpaceX is profitable on anything at this point.  Need more launches, not at discount for that to happen.

There is no way to know that unless you are on the inside

Offline QuantumG

  • Senior Member
  • *****
  • Posts: 9238
  • Australia
  • Liked: 4477
  • Likes Given: 1108
Re: SpaceX fundraising again
« Reply #26 on: 08/19/2014 07:04 pm »
...but the profit numbers, as far as I know, have not been released.

That's because there is no profit.

There is no way that SpaceX is profitable on anything at this point.  Need more launches, not at discount for that to happen.

There is no way to know that unless you are on the inside

It's pretty obvious they're living off CRS and CCDev funding. Hopefully they're not too dependent upon deposits.
Human spaceflight is basically just LARPing now.

Offline TrevorMonty

Re: SpaceX fundraising again
« Reply #27 on: 08/19/2014 07:23 pm »
Not unexpected given their low launch rate todate, 2015 should put them in the black.

Offline RocketGoBoom

  • Full Member
  • ***
  • Posts: 335
  • Idaho
  • Liked: 345
  • Likes Given: 315
Re: SpaceX fundraising again
« Reply #28 on: 08/19/2014 07:24 pm »
Must be nice to have a $10B valuation on ~$50M/year in sales (most of which is bookings - which in any other industry would count for $0.)

I can assure you that valuation is taking into consideration the manifest that is signed to launch with SpaceX. That is forward looking revenue which is very common, both in mature companies and with startups. Everything is based on 5 year projections for what the company  has planned.

For you to claim that their bookings / manifest counts for $0 is just silly.
« Last Edit: 08/19/2014 07:31 pm by RocketGoBoom »

Offline RocketGoBoom

  • Full Member
  • ***
  • Posts: 335
  • Idaho
  • Liked: 345
  • Likes Given: 315
Re: SpaceX fundraising again
« Reply #29 on: 08/19/2014 07:29 pm »
@Lar I'm surprised too. 200M at a 10B valuation means they're selling off 2% of the company, right? You can only do that so many times.

That is actually very small in terms of percentage. Very often a Series A or Series B round of funding can be for 25% to 50% of the company's valuation. It is really based on the position of strength or weakness of the company versus the new investors that want in.

A company in distress will have to give up a larger percentage of the total ownership to raise their targeted amount of money.

A strong company, where investors are banging down the door to get a piece of the action, will only have to give a very small percentage at a higher valuation.

Clearly SpaceX is in a strong position if they can raise money at a $10 billion valuation. The last time they raised money and numbers were in the media, it was mentioned at a $4 billion valuation.

The difference between then (it was early 2013 I think) and now is that SpaceX has had multiple successful launches to GTO for commercial customers. So now investors can make a lot more forward looking estimates about where the commercial launch market is going. And investors are betting that SpaceX is going to capture a large percentage of the business out there.

I think new investors are also betting that within 5 years SpaceX will also capture some piece of the pie from the DOD launches that ULA currently has. 30% of that DOD launch market is likely a reasonable estimate for investors to pencil into their valuation model.

As for margins and profits, we won't know that data until SpaceX files an S-1 with the SEC in preparation for going public. And that won't happen anytime soon. But SpaceX likely is disclosing that data to the new investors for this private offering. Those investors are sophisticated and know what to look for. If they saw something on the verge of failure, they wouldn't be investing at a $10 billion valuation.
« Last Edit: 08/19/2014 07:38 pm by RocketGoBoom »

Offline Coastal Ron

  • Senior Member
  • *****
  • Posts: 8862
  • I live... along the coast
  • Liked: 10199
  • Likes Given: 11934
Re: SpaceX fundraising again
« Reply #30 on: 08/19/2014 07:35 pm »
A simple multiplier on annual revenue or profit only makes sense for steady-state companies.

If you think they'll be worth significantly more than $10B within a few years, you should jump in if you can.

This is once again people insisting that a 10 year old company should be treated as a startup. That's a fool's game.

I like Steve Blank's definition of a startup:

"A startup is a temporary organization searching for a repeatable and scalable business model."

There is no time scale associated with that, and I would argue that once a startup has found it's first "repeatable and scaleable business model" that they are no longer a startup but a sustaining business that is trying to expand.

So, has SpaceX found a successful "repeatable and scalable business model"?
If we don't continuously lower the cost to access space, how are we ever going to afford to expand humanity out into space?

Offline Coastal Ron

  • Senior Member
  • *****
  • Posts: 8862
  • I live... along the coast
  • Liked: 10199
  • Likes Given: 11934
Re: SpaceX fundraising again
« Reply #31 on: 08/19/2014 07:51 pm »
Must be nice to have a $10B valuation on ~$50M/year in sales (most of which is bookings - which in any other industry would count for $0.) I suppose it's closer to $300M/year if you include NASA, but that's not scalable business.

Investors are looking for a company to invest in where they can get at least a 10X ROI within 5-10 years.  You can rarely do that in a 5-10 year period with a company that has already become a mature business, so of course you have to assume some risk on companies that have not started generating revenue (or not much).  Which is why investors bet on the POTENTIAL for revenue.

And of course the potential investors have a view into the potential business that we on the outside don't, so basing investment decisions on what we can see publicly today is like not leading your target when skeet shooting - you'll always be behind.
If we don't continuously lower the cost to access space, how are we ever going to afford to expand humanity out into space?

Offline Ludus

  • Full Member
  • ****
  • Posts: 1744
  • Liked: 1255
  • Likes Given: 1017
Re: SpaceX fundraising again
« Reply #32 on: 08/19/2014 07:55 pm »
Are we sure this isn't just another employee stock sale?

That 's exactly what it is. Another liquidity round. They try to do this about twice a year for employees and minority investors (Musk controls a majority).


Offline TrevorMonty

Re: SpaceX fundraising again
« Reply #33 on: 08/19/2014 08:39 pm »
Does somebody know how much of the launch fees are paid in advanced and how much after the launch?

Offline dcporter

  • Full Member
  • ****
  • Posts: 881
  • Liked: 266
  • Likes Given: 422
Re: SpaceX fundraising again
« Reply #34 on: 08/19/2014 08:40 pm »
Does somebody know how much of the launch fees are paid in advanced and how much after the launch?

My recollection from reading it in passing on this forum several years ago is that fees are paid on milestones, with nearly the entire fee paid by the time the rocket launches.

Offline RocketGoBoom

  • Full Member
  • ***
  • Posts: 335
  • Idaho
  • Liked: 345
  • Likes Given: 315
Re: SpaceX fundraising again
« Reply #35 on: 08/19/2014 08:46 pm »
Are we sure this isn't just another employee stock sale?

That 's exactly what it is. Another liquidity round. They try to do this about twice a year for employees and minority investors (Musk controls a majority).

Since Elon has not sold any Tesla or Solar City stock ever .... I wonder how he funds his billionaire lifestyle. It takes a few hundred million dollars to fund his personal lifestyle with the private jet, the $17 million mansion, etc. His official income from Tesla is something like $40,000 per year. He doesn't have any listed income as Chairman of SolarCity.

Per reports, he invested just about every remaining Paypal fortune dollar he had in Tesla and SpaceX back during the financial crisis in 2008-2009.

Elon has a lot more flexibility with SpaceX because it is private. I think past reports have placed his ownership stake at above 60% of the company. So perhaps he has also been liquidating a small percentage of his stock in SpaceX to fund his lifestyle. Probably not a huge amount, but it wouldn't surprise me if he has cashed out $100 million or more in recent years.

Offline PreferToLurk

  • Full Member
  • ****
  • Posts: 416
  • Liked: 388
  • Likes Given: 189
Re: SpaceX fundraising again
« Reply #36 on: 08/19/2014 10:00 pm »
Are we sure this isn't just another employee stock sale?

That 's exactly what it is. Another liquidity round. They try to do this about twice a year for employees and minority investors (Musk controls a majority).

Since Elon has not sold any Tesla or Solar City stock ever .... I wonder how he funds his billionaire lifestyle. It takes a few hundred million dollars to fund his personal lifestyle with the private jet, the $17 million mansion, etc. His official income from Tesla is something like $40,000 per year. He doesn't have any listed income as Chairman of SolarCity.

Per reports, he invested just about every remaining Paypal fortune dollar he had in Tesla and SpaceX back during the financial crisis in 2008-2009.

Elon has a lot more flexibility with SpaceX because it is private. I think past reports have placed his ownership stake at above 60% of the company. So perhaps he has also been liquidating a small percentage of his stock in SpaceX to fund his lifestyle. Probably not a huge amount, but it wouldn't surprise me if he has cashed out $100 million or more in recent years.

Wildly off Topic, so I half expect this post to go poof, but...

Private Jet not likely to be owned by Musk personally, but one of his companies. His car is likely free. He also likely takes a salary from SpaceX.  You would be surprised how little income someone with that high of a net worth really needs.  His mortage for instance is likely around 1%.  (I read somewhere that Mark Zukerberg's personal mortage rate was less than 1%).  So while he might be cashing in a little in the employee liquidation rounds he has with SpaceX, I would bet that it isn't very much. 

There is a reason the rich tend to get richer, and one of them is that the rich can actually live very cheaply.

Offline Lar

  • Fan boy at large
  • Global Moderator
  • Senior Member
  • *****
  • Posts: 13463
  • Saw Gemini live on TV
  • A large LEGO storage facility ... in Michigan
  • Liked: 11864
  • Likes Given: 11086
Re: SpaceX fundraising again
« Reply #37 on: 08/19/2014 10:07 pm »
No more on Musk lifestyle or PreferToLurk gets axed too. Er, I mean his post does.
"I think it would be great to be born on Earth and to die on Mars. Just hopefully not at the point of impact." -Elon Musk
"We're a little bit like the dog who caught the bus" - Musk after CRS-8 S1 successfully landed on ASDS OCISLY

Offline Coastal Ron

  • Senior Member
  • *****
  • Posts: 8862
  • I live... along the coast
  • Liked: 10199
  • Likes Given: 11934
Re: SpaceX fundraising again
« Reply #38 on: 08/19/2014 10:09 pm »
Are we sure this isn't just another employee stock sale?

That 's exactly what it is. Another liquidity round. They try to do this about twice a year for employees and minority investors (Musk controls a majority).

They have only done one liquidity round, or at least only one that Crunchbase knows about (the go-to source for tracking investments in the tech community).

As to $200M, that is too large for a liquidity round, so it is likely to be for capital projects such as the now-approved Texas launch site, reusability of the Falcon 9/H, and whatever the Raptor will be attached to.

Just as a general observation, investments usually are in the works for months since a lot of the time is taken in coming up with the valuation number.  It could have also been that they have been waiting for a trigger event, like the approval of the Texas launch site, in order to proceed since the valuation would be predicated on whatever the trigger event was and whether the proffered future still looks as rosy as management has suggested it would be.

Something else to watch on this is how much of it is follow-on investment from existing investors.  That's a pretty common occurrence in Silicon Valley today, and in fact the trend has been to "double-down" on existing investments instead of spreading their money across many investments.  For small, emerging companies that has created an investment crunch of sorts, but for SpaceX they are in the sweet spot (i.e. market validation, revenue and no near-term competitors).
If we don't continuously lower the cost to access space, how are we ever going to afford to expand humanity out into space?

Offline TrevorMonty

Re: SpaceX fundraising again
« Reply #39 on: 08/19/2014 10:33 pm »
With nearly 20 launches on manifest between now and end of 2015, cash flow shouldn't be an issue from now on. That is assuming they can duplicate the last launch. There is also another possible revenue stream, every recovered booster is a $20-30m bonus. Assuming a 50% recovery rate that is $200-300m bonus.

Tags:
 

Advertisement NovaTech
Advertisement Northrop Grumman
Advertisement
Advertisement Margaritaville Beach Resort South Padre Island
Advertisement Brady Kenniston
Advertisement NextSpaceflight
Advertisement Nathan Barker Photography
0