SpaceX Confidential

Ganesh Nayak
SpaceX has gained worldwide attention for its historic milestones, driven by the desire to revolutionise space technology
SpaceX
and to attain its ultimate goal of enabling people to live on other planets

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Transaction Details Valuation History / Liquidity / Exit

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Offering Amount Valuation Period Share Price Valuation Growth Initial Public Offering (“IPO”)

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US$100m c.US$30bn
• IPO for the launch services business will happen

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4Q 2012 US$14.00 US$2.0bn - once SpaceX can launch rockets every other
week without major issues

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Price Deal Type 1Q 2013 US$33.00 US$4.6bn +136%
• Possibility that the satellite internet business will
list separately
US$185 – 190 / share Equity

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• Targeted liquidity event in 2022
1Q 2014 US$43.00 US$6.0bn +30%

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Opportunity : a primary investment round of US$1bn directly into SpaceX Satellite-Internet Programme
• 1Q 2015 US$77.00 US$12.0bn +79% • SpaceX believes this business represents a

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• Expected Returns : 2 – 4x return, 7 year investment horizon (exit through share transfer or IPO)
Terms (1): 2% one-time management fee, 20% carry potential to create a new telecom company of
• 1Q 2016 US$96.42 US$15.0bn +25% the size of Comcast / Time Warner; management
Investment thesis :

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• Competitive advantage – SpaceX recovers and reuses rocket technology that allows launching of satellites into expects c.US$25bn in revenues by 2025
1Q 2017 US$105.00 US$16.2bn +9%

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orbit at one-fifth the cost of private competitors(2)
Market leader – developed Falcon Heavy, the most powerful operational rocket in the world, which can lift 2x Share Transfer

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the payload compared to its next closest operational vehicle at a third of the cost
3Q 2017 US$135.00 US$21.5bn +29% • SpaceX organises a tender, setting its new
• Proven capabilities – garnered >US$12bn of contracts to date and is expected to capture a larger market share valuation every 6 months
2Q 2018 US$169.00 US$27.5bn +25%

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of the launch services market in the future • Allows existing shareholders to sell via tender

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Business Overview Founder Background
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SpaceX is a private aerospace manufacturer and space transportation services company based in California, USA
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• Founded by Elon Musk in 2002, SpaceX operates through its 2 business units: (1) Launch Services , and (2) Satellite- SpaceX is founded by the visionary Elon Musk who is a proven entrepreneur, evident in his founding and
Internet Programme , and designs, manufactures, and launches reusable rockets, with plans to establish a global
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successful exits of PayPal, Tesla and SolarCity. SpaceX is currently valued at >US$150bn.
satellite internet service
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• Current rocket applications include space station resupply missions, commercial satellite launch missions and
US government national security missions
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• Launch Services Launched his first company, Formerly known as “X.com”,

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Builds and launches reusable rockets for both commercial and government projects, disrupting the space
• Zip2, at 24 years old and sold it Background PayPal operates a worldwide
transportation industry by providing low cost launch services for US$307m in cash and online payments system that
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• Successfully completed 67 launches utilising merely 4 kinds of rockets and space crafts, making them a market US$34m in stock options; supports online money transfers
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leader and disruptor in a traditional industry where rockets are built for single usage graduated from UPenn Mkt Cap (3): US$105.1bn
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• Secured >100 missions to date, which represent >US$12bn of contracts; expected to capture >50% of the
global commercial launch market in the next few years
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• Satellite-Internet Programme Currently Co-founder, CEO Driven by an effort to promote

• Announced plans to launch low Earth orbit (“LEO”) satellite constellation to provide gigabit internet globally, and Product Architect at Tesla, and advance sustainable energy
which is projected to commercialise in 2020 which produces mass-market and products for a wider
• The project’s viability depends on reusable rockets and technical work to enable LEO constellation to deliver electric cars as well as battery consumer base, Tesla acquired
broadband internet without latency issues products and solar roofs SolarCity in Aug 2016
• Taking a vertically integrated approach to solve the problem and deliver a competitive service, SpaceX recently Mkt cap (3): US$49.0bn Acquisition amount: US$2.6bn
established a satellite manufacturing operation to create a defensible business based on low launch costs
Sources: Company Data, Factiva
(1) Applies only to investment size of >US$250k; additional administrative fees may be involved for investment size of <US$250k
(2) ArianeGroup, Blue Origin, Orbital ATK, United Launch Alliance (JV between Lockheed Martin and The Boeing Company), etc. 1
(3) As of 6 Sept 2018
SpaceX (cont’d) Confidential
Ganesh Nayak
The world’s fastest growing providers of launch services is working on next generation, fully reusable launch vehicles that
SpaceX
will be the most powerful ever built, capable of carrying humans to Mars and other destinations Oct 15, 2018, 3:58:02 PM

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Launch Services Satellite-Internet Programme

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• Primary applications of rocket / spacecraft launch services include space station resupply missions, commercial satellite • Revolutionary idea to put satellites into a much lower orbit than usual, so as to cut the latency of

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launch missions and US government national security missions Satellite broadband services; target 684 – 823 miles in the air, compared to >22,000 miles for others
Since 2002, SpaceX has built a series of rocket and spaceship systems from scratch, with the core driving principle Internet Advantage of satellite-based broadband is that it can cover entire regions without the need to

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being to reduce costs substantially by making various parts of the system reusable build expensive land-based internet infrastructure – allowing for better targeting of rural areas

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• SpaceX is the market leader in launch services, with an estimated 29 launches by end-2018 which is >1.5x compared to
• Target to develop satellites like consumer electronics products – taking c.3 years to complete(1)
its closest competing rocket (Soyuz-2)
Satellite Shorter lifecycle increases innovation speed and enables defensibility based on low launch costs

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Continues to gain market share of awarded launch contracts due to its distinct advantage of reusability

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• Projected to take attain revenues of US$4.6bn by 2022; >80% market share on commercial and military segments by manufacturing • SpaceX’s competitive advantage is its reusable rocket technology that allows launching of
satellites into orbit at one-fifth the cost of private competitors
2025, which indicate a c.US$25bn upside on the launch services business in the long run

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Launched the first two test satellites in Feb 2018 and attained official license by the Federal

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Falcon I (Rocket) Falcon 9 (Rocket) Dragon (Spacecraft) Falcon Heavy (Rocket) Current Communications Commission (“FCC”) in Mar 2018 to operate broadband internet satellites
Currently retired
progress • Some problems to resolve are cost issues with regards to customer-premise equipment (“CPE”),

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which is ultimately needed to make distribution and execution viable

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• Management projects >US$10bn in revenues from the satellite internet business by 2022 and
Upside

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c.US$25bn by 2025, creating an entity valued between US$75m – 100m in the next 10 years
potential • SpaceX believes the satellite internet business represents a potential to create a new telecom
company the size of Comcast / Time Warner

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Key Customers Recent News
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Oct 2018 • Successfully launched the SAOCOM 1A satellite from Space Launch Complex 4E (“SLC-4E”) at Vandenberg Air Force Base
Since the first mission in 2006, SpaceX has made 67 successful launches in notable missions
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Sep 2018 • Falcon 9 successfully lifted off from Space Launch Complex 40 (“SLC-40”) at Cape Canaveral Air Force Station carrying the
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for prominent companies across the globe, with another 35 launches in the pipeline Telstar 18 VANTAGE satellite to a Geostationary Transfer Orbit
• Announce that Yusaku Maezawa – fashion innovator and globally recognised art curator – will be the company’s first private
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passenger flight around the Moon for 2023

Satellite telecommunications Others
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Aug 2018 • Announced the names of the first four astronauts to board Crew Dragon, which will return human spaceflight capability to the
US since the Space Shuttle Program was retired in 2011
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• Falcon 9 successfully lifted off from Space Launch Complex 40 (“SLC-40”) at Cape Canaveral Air Force Station carrying the
Merah Putih mission for PT Telkom Indonesia
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Jul 2018 • Successfully launched ten Iridium NEXT satellites – the seventh set of satellites in a series of 75 that SpaceX will launch for
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Iridium’s next generation global satellite constellation, Iridium® NEXT

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Jun 2018 • Falcon 9 successfully lifted for launch of its fifteenth Commercial Resupply Services mission (“CRS-15”); Dragon will return to
Earth with >4,000 pounds of cargo after 1 month at the ISS
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Mar 2018 • Received official permission from the US Government to launch a fleet of satellites designed to beam high-speed Internet
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signals down to Earth

Feb 2018 • First flight of Falcon Heavy, the world’s most powerful operational rocket by a factor of two, capable of carrying large payloads
to orbit and supporting missions as far as the Moon / Mars
Jun 2017 • Successfully achieved the first re-flight of a commercial spacecraft, Dragon; a historic milestone on the road to full and rapid
rocket reusability
Mar 2017 • First ever re-flight of an orbital class rocket, Falcon 9, which returned to Earth for the second time following delivery of the
payload

Sources: Company Data, Forbes, Fortune

(1) Compared to the industry standard of 15 years due to high costs incurred throughout
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SpaceX (cont’d) Confidential
Ganesh Nayak
The only private company capable of launching reusable rockets; made history again in 2018 when it successfully SpaceX
launched
Falcon Heavy, the world’s most powerful operational rocket by a factor of two

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Market Analysis Competitive Analysis

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Global launch services market

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• Space launch activity worldwide is carried out by the Wide variety of service offerings
SpaceX’s market share by awarded
civil, military and commercial sectors, with 2017

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recording a total of 33 commercial launches global commercial launches
64%

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• SpaceX is gaining its market share as more commercial
contracts are awarded to them, and is forecasted to

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capture >60% of the market by end-2018

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• In total, commercial launches generated revenues of 45%
>US$3bn, displaying a healthy increase from

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Non-reusable Reusable &
c.US$2.5bn in 2016 32% (1)
& expensive affordable

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• Most active regions in the commercial space are US,
Europe and China 20%
16%

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• For government contracts, SpaceX remains a top
competitor alongside United Launch Alliance (“ULA”) 7%

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• In Mar 2018, the US Air Force awarded SpaceX a

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US$291m contract to launch a military satellite
aboard Falcon 9, and said that the lower price was a
2013A 2014A 2015A 2016A 2017A 2018E Limited variety of service offerings
major factor in beating out ULA for the contract

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Conclusion Risks
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A series of unsuccessful launches, relaunches and / or
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SpaceX is founded by the visionary Elon Musk who is a proven entrepreneur; evident in his establishment of crashed rockets may jeopardise SpaceX’s future
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Tesla and successful exits of PayPal and SolarCity, which has made tremendous impact on various industries commercial viability; subsequently rendering it unable
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to secure future contracts

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Inability to execute a successful Satellite-Internet

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Exhibits an impressive competitive advantage over industry peers with its proprietary technology that enables Programme may depress SpaceX’s advantage as a
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reusability of rockets – enabling them to benefit from an unrivalled cost advantage diversified player in the market; thereby affecting
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their plans to diversify their revenues

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Complications in the development of future rockets

Caters to a wide variety of launch services, including cargo, crew transport and satellite launches, on top of being may result in delays to SpaceX’s growth strategies,
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on course to providing broadband internet connectivity through satellite internet services thereby distorting financial projections, margins and
valuation

Sources: Company Data, Federal Aviation Administration

(1) Northrop Grumman acquired Orbital ATK for US$7.8bn in Jun 2018, and renamed it Northrop Grumman Innovation Systems
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Disclaimer Confidential
Ganesh Nayak
SpaceX

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