SpaceX Business Model | How Does SpaceX Make Money?
SpaceX Business Model
SpaceX is the first private company NASA has granted a business license for launching payloads and people to space. It is an American aerospace company founded by Elon Musk to make space travel more affordable. Their innovative business model has enabled them to grow as a company and to reach their goals.
SpaceX was founded in 2002 by Elon Musk to colonize Mars. Musk felt that the only way to do so was to rely on sustainable and scalable means of transportation. Today SpaceX continues to develop technology to get people to Mars and starts by working here on Earth.
Since its founding in 2002, SpaceX has conducted hundreds of space launches. Elon Musk’s SpaceX launched 26 missions in 2020, smashing the previous calendar-year record of 21, set in 2018.
SpaceX is a part of a diverse group of companies, manufacturers, aerospace suppliers, distributors, and subsidiaries that work together to design, manufacture, and sell products both within the organization and third parties.
This company is focused on building the next evolution of reusable rockets to transport people and cargo to Earth orbit. The current CEO, Elon Musk, has a reputation for innovation and entrepreneurship.
In 2006, SpaceX began construction of the Falcon 1, a two-stage launch vehicle, while NASA awarded the company a contract to provide the cargo-carrying part of what is now known as the Commercial Resupply Services (CRS) program.
They design and manufactures rockets using their own processes and in-house expertise to help lower the cost of space transportation.
SpaceX designs, manufacture, and sells launch vehicles for delivering satellites into orbit. They also provide satellite launch services for various government and non-government entities. Additionally, SpaceX designs, manufacture, and sells its own line of Falcon launch vehicles.
SpaceX is also one of the contenders for constructing a human lunar colony, although they are not alone.
In early 2015, SpaceX announced that they had hired approximately 1,000 additional employees and then in February 2017, announced the hiring of an additional 1,300 new employees.
This was to bolster operations and add launch capability to meet the growing demand for satellite launches. SpaceX has been steadily increasing its workforce in anticipation of its goal to send its first sustained crewed mission to Mars by 2024.
SpaceX’s major accomplishments include the reuse of orbital-class launch vehicles and reducing costs in the space launch industry. The most prominent of these is the ongoing landings and relaunches of Falcon 9’s first stage following a multi-year program to improve the reusable technology.
SpaceX has used two different first-stage boosters, B1049 and B1051, seven times as of December 2020.
SpaceX is a private space enterprise, and the majority of its accomplishments are the product of self-funded growth projects rather than conventional cost-plus procurement by the US government.
As a result, many of its accomplishments are considered firsts for a private enterprise.
How Does SpaceX Make Money?
SpaceX makes money primarily through operating three distinct business segments: Commercial Launch Services, Commercial Satellite Services, and NASA.
SpaceX’s Commercial Launch Services segment contracts with governments and companies worldwide to launch satellites into orbit. This business is the source of much of SpaceX’s revenue.
SpaceX’s Commercial Satellite Services segment consists of contracting with satellite networks to deliver payloads into orbit for them.
They perform these services for various clients, including communications, weather forecasting, and global broadcasting companies.
SpaceX’s NASA segment focuses on the launch of NASA payloads into space and directly assists NASA in developing a human lunar colony by establishing a base on the moon.
SpaceX currently brings in most of its revenue from taking expensive satellites into space for telecom companies. But the real money is expected to come through space tourism.
Is SpaceX profitable?
SpaceX’s satellite launch business and its launch services are profitable, with revenue growing from $100 million in 2006 to $1.5 billion in 2014.
SpaceX’s revenue rose 48% in 2016 to $2.0billion in 2019. This was fueled by $1.8 billion in contracts with NASA, which included a $440 million contract for an additional launch of astronauts to the International Space Station (ISS).
SpaceX’s launch services business is the main revenue spinner for SpaceX. In 2017, SpaceX launched a total of 24 orbital missions, which included 17 commercial and 7 NASA missions.
SpaceX saw a huge jump in revenues due to their launch of the West Coast Communications Satellite, which fit with their strategy of launching affordable satellites into orbit and launching higher-end satellites themselves.
SpaceX is profitable on all of its other business segments, including the Commercial Resupply Services contract with NASA. While they make less money, they are still profitable and have never been audited at any point in time since inception.
SpaceX Value: how much is SpaceX worth.
In 2019, SpaceX raised a total of US$1.33 billion in three funding rounds. SpaceX’s value had risen to US$33.3 billion by May 2019, and it was expected to hit US$36 billion by March 2020.
As of March 2021, SpaceX’s market valuation is $74 billion, which is double what it was worth same time in 2020 and about half the market cap of Boeing, the nation’s largest aerospace firm.
SpaceX’s valuation is still far below the next closest company in the sector, Europe’s Arianespace. In 2021, Arianespace had a market cap of $132 billion.
The main competitors in the satellite launch services market are Arianespace, United Launch Alliance, and International Launch Services.
The main competitors for the NASA contracts are Boeing, Lockheed Martin, Orbital Sciences Corporation (now Orbital ATK), Space Exploration Technologies Corporation (SpaceX), Sierra Nevada Corporation, and Blue Origin.
SpaceX’s main competitor in the space transport market is Arianespace.