Since news broke that Elon Musk is personally running out of money, most of the focus has been on how his situation will impact Tesla Motors, the electric vehicle company he heads. But Musk has recently been placing more and more emphasis on his spaceflight venture SpaceX — finally drawing questions about how that company will survive without his continuous investments.
The Wall Street Journal reported that SpaceX will need to get $1 billion from somewhere in order to achieve its goal of busing astronauts back and forth from the International Space Station in the next 10 years. Considering that Musk likely can’t pump any more money into the company, and Congress is still blocking the Obama administration’s desire to support privatized space exploration, it’s unclear where these funds will come from. In fact, Musk has already had to sell off 20 percent of his stake in SpaceX.
But now SpaceX has responded to this question: Board member Luke Nosek of Founders Fund, a major investor in the company, told PEHub that SpaceX has been profitable for the last several years, and that it will be again in 2010, with or without federal funding. The company successfully sent its Falcon 9 rocket 155 miles up into orbit last week, and has more than 24 orders (totaling $2.5 billion in revenue) to deliver satellites into space over the next five years. The plan is to reinvest this cash in the company.
This is pretty impressive, considering that older, more established companies in this arena have failed to trump this achievement, including Boeing and Lockheed Martin. SpaceX also has the attention of NASA, which has selected it, as well as Orbital Sciences, to supply the International Space Station.
If no federal money is forthcoming. Nosek says he’s very confident about the company raising a sufficient amount of private capital to keep moving forward. Founders Fund told PEHub that it would be enthusiastic about doubling up on its investment.
That said, Musk told PEHub that the company doesn’t “anticipate needing to bring on additional investors and will not be conducting any equity financing rounds.” He didn’t rule out strategic investments. He also noted that the WSJ article touching off concerns about the company’s finances erroneously estimated the costs of the launch system SpaceX is developing.
Musk was also negative about potential government funding, stating that, “Under no circumstances would SpaceX be seeing a financing round from the taxpayers.”
Going public may also be an option for SpaceX to raise the money it needs to deliver on its promises to NASA and other satellite-building companies. The launch of the Falcon 9 attracted a lot of attention and positive press suggesting that privatized spaceflight might be a viable industry.
Going the IPO route seems to be the chosen strategy for Musk. Many analysts are saying that Tesla Motors, his other high-profile venture, needs to go public (it filed at the end of January) in order to keep its plans on track as well — plans that include the acquisition of the NUMMI automotive plant in Fremont, Calif., and vehicle-building partnership with Toyota.