SpaceX Fundraising Exactly Covers 800 Satellites for an Operational Starlink Service

SpaceX is raising $500 million at a $30.5 billion valuation to get the Starlink Satellite network deployed.

SpaceX will get money from existing SpaceX investors and new investor Baillie Gifford and Co, who is also the third-largest shareholder in Musk-led electric carmaker Tesla.

How Much Starlink Could You Get With $500 million?

The SpaceX Super Heavy Starship would make the Starlink Satellite network very cheap to deploy.

In December, SpaceX proved that they should be able to reuse the first stage four times or more. Previously they were able to reuse two times. They flew the first stage once and then reused it once. They can now fly it once and re-use three or more times. SpaceX believes they can reuse it nine or ten times and then give them an overhaul and continue using them.

In 2019, let us suppose the average first stage re-use is four times. I think the first stage is about $30 million in cost. All of the Starlink launches would be to low-earth orbit and would be reusable.

$62 million price for SpaceX Falcon 9 block 5 launch. 30% operating margin.
$43.4 million in cost for one-time launch.
$30 million for first stage. A first stage reused four times is $8 million per launch. A first stage that is reused ten times is $4 million per launch.
$6 million for faring or nose cone payload covers. Those are now waterproof and can be reused. $1 million per launch including recovery and clean-up.
$7.5 million for second stage.

Each SpaceX Starlink Falcon 9 launch is $12.5 million to 16.5 million in cost.

A highly reusable Falcon 9 block 5 would cost about $12.5 million for launching 20 Starlink Satellites with each launch. This would be about $1 billion in launch costs for 1600. This is for 80 launches.

Getting to 1600 Starlink satellites would service the northern hemisphere. This is where New York, London, Tokyo, Paris, Zurich, Shanghai and other world financial capitals are located.

SpaceX anticipates starting service with around 800 satellites in 2020 or 2021. This is 800 Starlink satellites using 40 launches. This is the $500 million SpaceX is raising.

The numbers from Elon Musk tweets about the first stage and faring costs and the fundraising all tick and tie. Tick and tie is corporate finance jargon.

This is enough to get SpaceX to a lot of revenue. This would not be the full revenue from the full first phase of 4425 satellites or after both phases with 12000 satellites. It would still billions per year. It could be enough to pay for the remaining Starlink launches or to build the Super Heavy. As they get close, SpaceX can go back and raise a few billion at a $100 billion valuation.

Minimum Starlink Before the SpaceX Super Heavy

It would only take seven launches of the Super Heavy Starship to deploy the first 1600 Starlink satellites.
This would be about $70 million in launch cost. However, the Super Heavy will cost at least another $2 billion to develop. The SpaceX Super Heavy will not be flying payload to orbit until about 2022.

Falcon Heavy and Orbital Planes

I have seen estimates of the 20 satellites per Falcon 9 launch and the 200 for the Super Heavy. I have comment critique that this is too optimistic. It could be optimistic especially based upon fuel, reuse and which orbit different satellites need to be placed.

The Starlink satellites are not finalized and neither is the Super Heavy. My assumption is they will try to make the first 800 or even 1600 Starlinks operational before the Super Heavy. I think SpaceX moves forward on Starlink as much as possible without Super Heavy. The estimates could indeed be high based upon how many can be launched in one and still return to land for reuse. There is different fuel needed to get to different orbital planes.

Some tough orbits may need more costly Falcon Heavy launches. Falcon Heavy’s would be more reusable than a F9. Three first stages and faring are reused in the Falcon Heavy. If SpaceX masters Heavy reusability, then actual SpaceX costs are not badly impacted using the Heavy. Costs can even improve as Heavy launches can put up about double the satellites of an F9 launch. I did not want to go into the variance on orbital planes or using Heavies. I do not think those things throw off the analysis that much.

The Falcon Heavy reuses three first stages. This would be $12 million for the ten reuse assumption. The $7.5 million second stage is thrown away and we have the $1 million reusable faring. This is $20.5 million with perhaps double the satellites. The fuel costs are only about $200,000 to $400,000 per launch. The Falcon Heavy can reach tough orbits. The satellites will not need to use up a lot of fuel to reposition.

SpaceX might even only get 600 satellites of the operational 800 before they have to dip into assumed profits in 2019 and 2020. Alternatively, Spacex could need a new cash raise or loan at a higher valuation at some point.