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SpaceX reveals new details about its biggest, most secretive projects


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SpaceX founder and chief executive Elon Musk speaks after announcing Japanese billionaire Yusaku Maezawa as the first private passenger on a trip around the moon, Monday, Sept. 17, 2018, in Hawthorne, Calif.

By Tim Fernholz, Quartz

SpaceX’s most ambitious projects are to surround the world with a network of internet satellites, and to build a huge rocket that can carry humans to the moon and Mars. Recent regulatory filings, market intelligence and, naturally, tweets from founder Elon Musk provide new details about the two projects and an inkling of how they will be paid for.

The company’s main product, the Falcon 9 rocket, was certified by NASA yesterday for its most expensive scientific missions, a “major achievement for the Falcon 9 team” per SpaceX president Gwynne Shotwell. The company disclosed that it has at least 22 Falcon 9 missions planned for 2019, a robust manifest (and revenue) underscoring the maturity of the vehicle as it prepares to fly astronauts next year.

But the world only spends $5.5 billion on rocket launches each year; competing against national champions in Europe, Russia and China, SpaceX can’t dominate that market totally despite its commercial advantages. To justify its enormous $27 billion valuation, it needs to develop new lines of business.

Space internet

Starlink, a plan to launch several thousand satellites into low-earth orbit and provide internet service to users below, has been at the heart of SpaceX’s financial plans for years. This year has seen ups and downs: The successful launch of two prototype satellites for the constellation and government approval for the plan, but also a significant re-organization of its strategic leadership. SpaceX has refused to say who at the company is now in charge of of designing and building the satellites.

Nonetheless, the company still targets 2020 to launch the service and plans to launch its first batch of satellites by the end of next year. One computer scientist, Mark Handley at University College London, believes the connection will be speedy enough to attract high-speed traders seeking an advantage over their rivals.

The Falcon 9 does its thing.

SpaceX is making moves in Washington during the FCC’s “Space Month,” a push by commission chair Ajit Pai to demonstrate government commitment to easing the regulatory path for extra-terrestrial business. One issue is that the plan for Starlink requires eventually launching 4,425 satellites—doubling the number currently in orbit, and raising the risk of collisions and new space debris.

On Nov. 7, a SpaceX executive working to obtain licenses for the satellites met with Pai to express how seriously SpaceX takes this concern, noting that the company’s survival depends on being able to launch satellites, making debris a threat to its bottom line. The next day, SpaceX filed a request to change how high its satellites will orbit, lowering them 560 kilometers (348 miles) than the company had originally planned.

A lower orbit reduces risk because the satellites will fall into the atmosphere within five years, a method of safe disposal that also uses 16 fewer satellites. While the decision means a faster connection for users, SpaceX must sacrifice some geographic reach and amortize its investment in the spacecraft over a shorter period of time. The company clearly reckons those costs are worth winning regulatory and stakeholder approval.

Matt Desch, the CEO of Iridium, a leading satellite firm and SpaceX launch customer, called the move “very responsible.”

Money for big ideas

Starlink’s stated purpose is to raise enough money for the company to get its Martian dreams off the ground. But Starlink itself is no cheap proposition, and SpaceX is preparing to tap the debt markets to fund its plans. The company is seeking to raise $750 million in debt through an offering managed by Bank of America, according to Bloomberg.

The deal had originally been handled by Goldman Sachs, Musk’s usual banker, but the investment bank reportedly bowed out over concerns that SpaceX would seek to take on even more debt in the future. The company currently has no major debt and insists that it is cash positive, but relies on deposits on future launches and government development funding to keep in the black.

The firm’s first space vehicle, Falcon 1, was funded mostly out of Musk’s pocket; its next big project, Falcon 9 and the Dragon spacecraft, was backed by government developing funding. While Google and Fidelity invested $1 billion in SpaceX in 2015 in part to fund Starlink, it’s been more difficult to find money for the BFR, the enormous, fully reusable rocket the company wants to launch by 2022 to fulfill its ambitions to travel into the solar system.

One source has been space tourism. Musk took a significant deposit, on the order of hundreds of millions of dollars, from Japanese billionaire Yusaku Maezawa in exchange for a future trip around the moon.

A rendering of the BFR and its booster rocket created by SpaceX.

Musk tweeted an update to the BFR plan on Nov. 8, announcing that SpaceX’s engineers would build a mock-up of the vehicle small enough to be launched on a Falcon 9 booster. This will allow them to test both the material that will protect the spacecraft from the heat of re-entry, and the vehicle’s ability to control itself as it flies many times faster than the speed of sound, neither of which can be adequately tested in simulations. Musk says the craft, modified from the second stage of the Falcon 9, will be ready to fly to orbit in June 2019.

It also may be cheaper than building a full-scale mock-up of the BFR spacecraft, which Musk had previously said would be performing low-altitude take-off and landing tests in 2019. Still, Musk says that ship is coming as well, though when is anyone’s guess.


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Technology - U.S. Daily News: SpaceX reveals new details about its biggest, most secretive projects
SpaceX reveals new details about its biggest, most secretive projects
Technology - U.S. Daily News
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