With each additional successful launch and commercial flight Elon Musk’s SpaceX gets more and more valuable. For those employees who have been with the company for much of its 10-plus years, that’s a long time to wait for a payout on the hours of blood, sweat, and tears contributed. And while an IPO seems inevitable, there’s no date on the calendar at present.
I was not surprised then when I first heard rumors that the company had conducted a small $20 million to $30 million stock sale at the end of last year to provide liquidity to early employees. What was surprising was the valuation that I heard batted around: $6 billion.
For reference, PrivCo placed SpaceX’s secondary market trading price at $10 per share in April 2012, prior to its first successful launch, for an implied valuation of $1.2 billion. Immediately following the June launch, this valuation reportedly doubled to $2.4 billion.
A bit of digging revealed that Draper Fisher Jurvetson (DFJ), an existing SpaceX investor, led an unreported $30 million investment in the company in December. Given the timing, it appears that this is the same round we’ve been hearing.
When reached for comment, DFJ’s Steve Jurvetson provided only a boiler plate quote on his firm’s investment, saying:
We are delighted to be venture backers of Elon Musk across all of his companies. SpaceX is revolutionizing the space industry for the benefit of all current markets, and then for the bold exploration of the final frontier.
An email response from SpaceX CEO and resident Tony Stark, Elon Musk, confirms a regular employee liquidity program and pegs the valuation of the latest round in the neighborhood of $4 billion to $5 billion.
SpaceX does small stock sales every six months or so to provide liquidity to employees, since we are not public. We don’t comment on valuation (big advantage of being private!), but it is around midway between those two numbers [$2.4 billion and $6 billion].
SpaceX has signed more than $4 billion of commercial and government launch contracts to date, making the rumored valuation reasonable as a multiple of revenue. It’s also difficult to extrapolate an overall enterprise valuation from a single transaction representing 0.5 percent of a company’s stock. We saw the risks of leaping to such conclusions following Facebook’s secondary market run-up and subsequent IPO debacle.
If anything, this latest round shows that SpaceX has long since grown into its early hype and is taking proactive steps to manage employee liquidity so as to avoid a rush to IPO.
Elon Musk’s other ventures, Tesla and Solar City, are both up significantly from their IPO prices, with current marketcaps of $4.1 billion and $1.27 billion respectively. Musk is famously the only man besides Jim Clark to found three billion dollar companies including his original win with PayPal – four if he would give himself credit as the chairman and largest investor in Solar City. Not bad for a 13-year career.
[Illustration by Hallie Bateman]