How SpaceX makes money | SpaceX Business Model
In this particular post, We will discuss business model of SpaceX and how SpaceX makes money. So do read this 2-3 minutes article and understand the maths of of their business model. In the end of this post I will share a video which will summarise this article about SpaceX.
SpaceX History | Funding | Valuation
SpaceX was founded by Elon Musk in 2002 and at the time of writing this article company has bagged about $3.2 Billion of funding. Current valuation of SpaceX is around $34 Billion with some good investors in their bucket including Google. Elon Musk holds around 54% shareholding in the company with planning to take go public in coming years just like his another company Tesla.
Below is the timeline of SpaceX from starting. Their are many more events to mention but to keep this post limited to business model I am highlighting only few of them which are as follows
SpaceX Major Clients
major clients of SpaceX are as follows:
- Telecom companies
- US military
- Businesses who wants to send cargo in space
- Rich tycoons
SpaceX Major Products as of now :
SpaceX has 3 major products as of now:-
- Falcon 9
- Falcon Heavy
SpaceX Business Model:
Now let us understand SpaceX business model. For this we have calculate the cost of their Rockets and what they charge from their customers for that. Because this is the basics of every business ( Profit = Revenue – Expense). Let us take example of Falcon 9 ( Falcon 9 rocket + dragon capsule) first. SpaceX charge around $62 Million for 1 launch of falcon 9 and can add upto $20 Million basis the complexity. So now we know the revenue. Let us calculate expenses. Every spacecraft has three stages as shown in Image below. Elon musk stated in several interviews that rocket costs around 70% of total spacecraft and one falcon 9 rocket costs about $35 Million. This means the entire space craft will cost around $50 Million. In simple maths space X got $12 Million in their pocket for each launch.
The Game Changer:
So SpaceX has specialised in getting their rockets back to earth and reuse in future flight. This technology saves them minimum $20 Million for falcon 9 and $60 Million for falcon heavy. and boost their profits to minimum $30 Million per launch. Thats their motto ” to make space travels cheaper and affordable. Same thing we can calculate for falcon heavy but pricing of Falcon heavy is relatable cheaper than falcon 9. Also only 3 flights of falcon heavy took place as of now. No. of flights of Falcon 9 is as follows:
I am not analysing the profitability of falcon heavy in this post. If you want to see the same than you must the video in the ed of this post.
SpaceX Space Tourism:
Soon SpaceX will launch space tourism and will send rich people who can afford their tickets to Space, Moon and even Mars. As per musk they will send 2 tourists in space by the end of 2020 and to moon by 2023. Japanese billionaire Yusaku Maezawa has funded spaceX moon mission in 2023. Before that they will send approx 20 people to space by the end of 2023. If this get successful, major portion of SpaceX profit will come from this line of business.
Starlink is a satellite constellation which is constructed by SpaceX to provide satellite Internet access. This will consist of thousands of mass-produced small satellites in low Earth orbit, working in combination with ground transceivers. 60 no. of satellites were sent to space in each journey as of now. SpaceX will launch beta testing of their internet service in Canada and America by the end of 2020 and by 2023 they will reach to 30% of population. SpaceX will earn considerable amount of money through this project in future and may setup another company who look after only this business.
Starship is the upgraded version of Falcon heavy and will take humans to Moon and Mars in future. SpaceX is actively working in launching Starships soon.
Conclusion : So concluding this post with just a statement that SpaceX has huge potential of earning in future as they have spent heavily of R & D and has no competitor as good as them. So being a monopoly player in the market their success is for sure and we can see miracles in coming days.
SpaceX Business Model | Video:
In this video below, I have discussed the business model of SpaceX in detail. If you want to listen the complete explanation in Hindi than you can watch it and do share it with your friends if you like it.