Starlink is a satellite internet constellation operated by SpaceX, the private space company owned by Elon Musk. As of 2022, SpaceX has launched over 3,000 Starlink satellites into orbit, with plans to launch up to 42,000 satellites to provide high-speed, low-latency internet globally.
The Starlink constellation has been a multi-billion dollar investment by SpaceX and outside investors like Bloomberg Beta, Fidelity Investments, and Valor Equity Partners. With millions of subscribers projected by the mid 2020s, Starlink is expected to be a highly lucrative business for SpaceX and investors.
Earlier in 2022, it was reported that SpaceX was planning to spin off and take public its Starlink satellite internet business in the coming years. This would allow public market investors to get exposure to this high-growth next generation satellite internet provider. As per analysts’ projections, Starlink could be valued at over $100 billion at IPO.
SpaceX has invested billions into the Starlink mega constellation over the past years
Since the first Starlink satellites were launched in 2018, SpaceX has been rapidly expanding the constellation each year. To date over $10 billion has already been invested into designing, building and launching the thousands of Starlink satellites. In addition, billions more will be required to launch the remainder of the planned 42,000 satellite constellation.
The massive capital investment into Starlink has come both from internal SpaceX funding sources like its profitable rocket launch business, as well external investors. Over the past few years major backers like Bloomberg Beta, Fidelity, Valor Equity Partners and more have invested into Starlink at ascending valuations, showing the promise investors see in this next gen internet business.
Starlink aims to IPO when revenue is more predictable
In February 2022 at a company talk, Elon Musk stated that SpaceX is planning to spin off and IPO Starlink when there is more certainty and predictability around its revenue growth. This is expected to be sometime within the next several years.
Currently Starlink’s subscriber figures and future cash flows are harder to predict accurately given the satellite network is still rapidly expanding. However once a substantial portion of the planned 42,000 satellites are in orbit and the subscriber figures start to plateau, there will be greater revenue clarity that public market investors desire.
As per Elon Musk’s statements, the Starlink IPO would be done with the objective of raising capital to further the development of SpaceX’s ambitious Starship and Mars rocket system. So the expectation is that Starlink will IPO well before the entire satellite network is complete.
Starlink IPO could give public market investors exposure to a $100B+ satellite internet biz
According industry projections, Starlink is expected to have several million subscribers and billions in revenue by the middle part of this decade. The recent explosive growth in subscribers suggests the demand for fast, reliable satellite internet is truly global for both individual and enterprise usage.
Given analysts predict Starlink could reach $30 billion or more in annual revenue by 2025, at IPO the company could be valued at over $100 billion. For public market investors, this would provide a unique opportunity get in early on an extremely high growth, next generation internet provider before wider Wall Street realizes the immense earnings potential.
In summary, SpaceX’s Starlink satellite mega constellation is expected to move towards an initial public offering by 2024 or 2025 based on Elon Musk’s guidance. The IPO will happen once the network expansion is somewhat mature and the business has stable free cash flows. This would allow public market investors exposure to a multi-hundred billion dollar space-based global internet provider uniquely positioned to dominate consumer and enterprise high speed internet access for decades.