Private spacecraft engineering company SpaceX is known for its reusable rockets and Starlink satellites. In recent years, the Starlink satellites, which provide Internet access to over 23 countries, have been in the news for everything from helping Ukraine to breaking records. So, it is not surprising that many would be interested in a Starlink IPO if there is one.
In February 2021, CEO Elon Musk has tweeted that once the space company starts turning profits, he will take it public.
Once we can predict cash flow reasonably well, Starlink will IPO
— Elon Musk (@elonmusk) February 9, 2021
It looks like the time is near. On February 12, SpaceX sent its 10th mission of the year – a Falcon 9 rocket that carried 55 Starlinks. And according to experts, a Starlink IPO is imminent as the company inches towards profitability.
The Starlink IPO: Are there enough profits?
Starlink consists of over 3,500 satellites in low Earth orbit that communicate with ground transceivers and provide Internet services across the world. SpaceX has plans to deploy 12,000 more and eventually have 42,000 in orbit. Last year, the company also increased its rates and left many prospective Starlink customers in the dark without information on when their connection will be up.
The aerospace company has over one million subscribers as of December 2022 and recorded its first positive cash flow quarter last year. SpaceX President Gwynne Shotwell also noted that the company is on track to turn a profit.
On February 8, at the Federal Aviation Administration’s annual Commercial Space Transportation conference in Washington DC, Shotwell revealed that the company “will make money.”
A positive cash flow means that the company is making more cash than its expenditure. It is key to gauging and planning a company’s long-term growth.
Last year, SpaceX generated $3.3 billion in revenue, out of which roughly $1 billion came from Starlink, according to Mo Islam, who previously worked with JP Morgan.
SpaceX valuation and Starlink’s Prospects
One of the most renowned companies in the world, SpaceX has partnered with NASA on multiple projects. It aims to revolutionize space travel and provide Internet access to the remotest corners of the globe. One of the projects in the works is the Starship. If successful it can be used to facilitate human travel between Mars and the moon, and also ferry massive amounts of cargo into space.
But the most popular SpaceX product is the Starlink satellite. Both retail and private investors want a piece of the pie but equity is limited as the company is private. All that could change with the Starlink IPO. For the public offering to become a reality, Starlink first needs to prove its mettle by bringing in the money.
While Shotwell did not provide additional details about the earnings, it is no secret that SpaceX is continuously working on expanding its Starlink offerings. At the conference, she admitted that as the main launch business is already profitable, they are not in any hurry to take in external investments.
In early January, CNBC reported that SpaceX had raised $750 million from venture capital investors at a $137 billion valuation. In 2022, the company had raised over $2 billion as eagle-eyed investors opened up their purses to fund the company’s space sojourns.
CEO Elon Musk has also been cautious about the Starlink IPO as he referenced history in a 2021 tweet. “Every new satellite constellation in history has gone bankrupt. We hope to be the first that does not,” stated the billionaire entrepreneur.
Musk has repeatedly admitted that he is aware of investor expectations when it comes to a public offering. In 2022, he mentioned a timeline of 2025 for the IPO, as he expects the company to grow sufficiently large by then.
His priority is to ensure smooth revenue and predictable growth before he turns to the public to invest in the company. SpaceX has so far made no comment on a prospective date or timeline for a Starlink IPO, despite admitting to its turning fortunes.
