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How Does SpaceX Make Money (Business and Revenue Model)

The SpaceX business model

How Does SpaceX Make Money?
Here’s what you should know:
  • What is SpaceX, and how does SpaceX work?
  • How does SpaceX make money?
  • Government Contracts
  • Starlink
  • Rideshare Program (Commercial Flights)
  • SpaceX’s Subsidiaries, Acquisitions, and Exits
  • SpaceX’s profit and revenue
  • What is the SpaceX business and revenue model?
  • SpaceX’s funding and valuation

How does SpaceX make money? Here is a full, in-depth, breakdown of their three (3) revenue streams and the different products and services they offer, as well as the SpaceX business model, their profit and revenue, and how SpaceX works.

What is SpaceX, and how does SpaceX work?

SpaceX is an aerospace and aviation company that designs, manufactures, and launches some of the world’s most advanced rockets and spacecrafts.

Founded in 2002 by Elon Musk, SpaceX has now become one of the top contractors of space transportation services and aerospace manufacturers amongst its peers.

Some of SpaceX’s competitors include Boeing, Blue Origin, Virgin Galactic, and other space exploration / space transportation service companies.

SpaceX | SpaceX Business Model | How Does SpaceX Make Money? | How Does SpaceX Work?
Source: Linkedin | SpaceX

How does SpaceX make money?

Over the years, SpaceX has won a growing number of large contracts, including a $2.9 billion contract from NASA back in October 2021, as well as expanding its companys’ services with Starlink and commercial flights.

So how does SpaceX make money off of all these contracts and additional services such as Starlink?

Below is a breakdown of how much money SpaceX makes and its revenue model. Including all revenue streams and how much they charge for their services.

Here are the 3 ways of how SpaceX makes money (in 2022):

SpaceX has a revenue model that makes money in three (3) ways – government contracts, Starlink, and SpaceX’s Rideshare Program.

#1. Government Contracts

Up until a few years ago, SpaceX had made all of its money through placing bids and winning government contracts.

So, what are government contracts, and how does SpaceX make money from them? Well, SpaceX and other contractors, such as Boeing and Blue Origin, place bids, governmentally and commercially, to win contracts for jobs.

Some of these jobs they are contracted for include things like using their rockets to resupply the NASA space station in space, transporting military supplies and humanitarian aid around the globe, or taking astronauts from lunar orbit to the surface of the moon.

You can think of SpaceX much like a trucking company that gets hired to transport and deliver goods from point A (earth) to point B (space).

Although there is no complete list of every contract SpaceX has ever won and fulfilled since its 2002 beginnings, you can check out this fan-made list of pieced together contracts SpaceX has won over the years (totaling into billions of dollars) – which include contract dates, payment amounts, contractual obligations, etc.

Below is an image of one of SpaceX’s largest employers, NASA. This list, released by NASA, shows their top contractors of FY 2020. If you zoom in, you can see SpaceX (Space Exploration Technologies Corp.) is 6th on that list.

SpaceX Goverment Contracts | SpaceX Business Model | How Does SpaceX Make Money? | How Does SpaceX Work?
Source: osbp.nasa.gov

Note: Some of the goverment departments and agencies SpaceX has been contracted by include NASA, the Military, the Pentagon, the US Space Force, and moreamong commercial hires.

SpaceX also makes money through its internet service business, Starlink – which is a division of SpaceX.

In October 2020, SpaceX launched its beta service for the internet company in the US and has since grown to more than 250,000 paying customers, according to Musk.

Starlink Pricing:

  • $99 per month plus a one time fee of $499 for the hardware
  • Starlink Premium: costs $500 per month plus a one time fee of $2,500 for the hardware
Starlink Cost | Starlink Business Model | How Does Starlink Make Money? | How Does Starlink Work?
Source: Starlink

Note: 250,000 Starlink customers would bring in more than $300 million of revenue per year for SpaceX.

#3. Rideshare Program (Commercial Flights)

While this is still in its early stages, SpaceX has already made money launching three (3) of these smallsat rideshare missions and is currently taking on more bookings for the opportunity to fly to space through its Rideshare Program – with flights spaced out approximately every 4 months.

The base rate is $1.1 million for a spacecraft holding a max capacity of 200 kg (440.9 lbs) with additional mass priced at $5,500 per kg (2.2 lbs) thereafter.

SpaceX Rideshare Cost:

  • starting at $1.1 million per flight (plus an additional $5,500 per kg of mass and available add ons)
SpaceX Rideshare Cost | SpaceX Business Model | How Does SpaceX Make Money? | How Does SpaceX Work?
Source: Space Coastal Launches

Note: There are also a number of add ons flight goers can add to their trips such as insurance, a separation system, fuel, and more.

SpaceX’s Subsidiaries, Acquisitions, and Exits

To date, Space Exploration Technologies Corp. (SpaceX) has made a total of 1 acquisition.

SpaceX Acquisitions | SpaceX Business Model | How Does SpaceX Make Money? | How Does SpaceX Work?
Source: Crunchbase

SpaceX’s profit and revenue

SpaceX’s last reported revenue of $2 billion was in 2019. Since then, nothing has been verified or confirmed on future revenues.

Note: Because Space Exploration Technologies Corp. (SpaceX) is a privately held company, they are not required to make their annual reporting, such as Form 10-K’s, pubic.

What is the SpaceX business and revenue model?

SpaceX makes money through a few revenue models that they combine within their company, they are:

  • Infrastructure as a service (IaaS) business model
  • Business-to-business (B2B) revenue model
  • Subscription based business model
  • Transaction based business model
  • Mergers & acquisitions (M&A) business model

SpaceX’s funding and valuation

According to SpaceX’s Crunchbase profile, SpaceX has raised $7.7 billion over 62 rounds and has a valuation of $100 billion as of October 2021.