In a move that gives Elon Musk’s SpaceX a $10 billion valuation, Google and Fidelity are investing $1 billion in the Tesla founder’s space-technology company.
The investment gives the two companies 10 percent of Space Exploration Technologies — SpaceX — Musk’s company for developing space technology, including rockets and new satellites. Google said its share is 7.5 percent.
The investment was announced in a short statement posted on the SpaceX website Tuesday.
“This funding will be used to support continued innovation in the areas of space transport, reusability and satellite manufacturing,” the statement said.
Google released its own statement Tuesday.
“Space-based applications, like imaging satellites, can help people more easily access important information, so we’re excited to support SpaceX’s growth as it develops new launch technologies,” the statement said.
Don Harrison, Google’s vice president of corporate development, will have a seat on SpaceX’s board.
Google and Fidelity join SpaceX investors Founders Fund, Draper Fisher Jurvetson, Valor Equity Partners and Capricorn.
Analyst Trip Chowdhry of Global Equities Research said that “what investors are missing is that Elon Musk is not creating products or companies. … He is creating industries, which many of us are currently unable to appreciate.”
Speculation has mounted recently over Musk’s plans for a ring of communications and imaging satellites around the planet.
In an interview with Bloomberg last week, Musk said SpaceX will open an engineering office in the Seattle area to develop and build commercial satellites. The office, initially staffed by 50 to 60 people, could eventually have “hundreds” or even 1,000 people working in it, he said.
“We’re going to try to do for satellites what we’ve done for rockets,” he said, “and see if we can make some improvements to satellites.”
He said “most satellites,” especially large geostationary satellites, are “primitive” since they’re built with proven technologies that are as much as a decade old at launch time.
“By the time satellites are launched, they are really outdated,” he said.
Smaller, less expensive satellites launched more frequently will allow for more experimentation with new technology, Musk said.
Google has also expressed interest in developing a system that would use balloons to deliver wireless internet connections via cellphones to remote, undeveloped countries. The company calls it Project Loon.
SpaceX is developing reusable rocket systems. A Falcon 9 rocket made by the company attempted to land on a floating barge recently, but crashed.
Musk also has plans for the colonization of Mars.
He told Bloomberg that a successful commercial-satellite venture could help raise the capital for a city on Mars.