SpaceX heads for the IPO Launch Pad

Key takeaways

SpaceX redefined the economics of space access. Reusable launch technology fundamentally altered the cost curve for reaching orbit, expanding the addressable market and potentially enabling entirely new industries and business models.

Following innovation early can change how investors see the future. Tracking SpaceX’s growth for over nearly a decade helped shape our thinking around communications, AI, infrastructure and defense technologies long before those themes became mainstream.

Starlink expanded the thesis far beyond aerospace. The evolution from launch provider to global connectivity platform reshaped how we viewed SpaceX’s long-term strategic importance and competitive positioning.

SpaceX may be one of the first true multi-sector platform companies. What began as a launch business now sits at the intersection of communications, infrastructure, transportation, defense and AI-driven data networks.

SpaceX redefined the economics of space

Today, most investors look at SpaceX and see a potential IPO and a valuation that will make it one of the most valuable companies in the world.

When we first started researching the company more than a decade ago, we saw a business much earlier in its evolution whose long-term potential was far less obvious.

There was no Starlink. The company was still primarily focused on reusable rockets and cargo launches, and many investors viewed it simply as an aerospace company with big dreams.

What interested us was something broader: the possibility that dramatically lowering the cost of accessing space could fundamentally reshape the economics of multiple industries.

If launch costs declined far enough, that lower-cost structure could potentially unlock entirely new business models that emerge on top of that infrastructure—from communications and defense technologies to data infrastructure and artificial intelligence.

That possibility was what led Franklin Venture Partners (Franklin Equity’s embedded venture investing team) to begin engaging with SpaceX over a decade ago.

Following innovation early can change how investors see the future

One of the biggest misconceptions about private investing is that access itself is the advantage. In our view, the real edge comes from building conviction over time.

Franklin Venture Partners works closely alongside Franklin Equity’s public market investors, allowing both teams to share research, management access and thematic work across public and private markets. That collaboration allows us to follow early-stage growth companies over before they become widely understood public equities.

In SpaceX’s case, our work included evaluating launch cadence improvements, manufacturing scale advantages, communications infrastructure economics and the durability of the company’s technology lead as the business evolved.

Our fundamental research team analyzes hundreds of private companies but invests in only select few where we believe the market opportunity, execution capability and long-term competitive positioning are truly differentiated.

We spent years studying SpaceX before investing in 2022.  We wanted to see if reusable launch technology could consistently improve economics, if Starlink could evolve into a durable communications platform and if the company’s engineering and manufacturing advantages would continue to widen over time.

Watching those questions get answered was critical in shaping our conviction.

Following SpaceX over that period changed how we thought about industries far beyond space itself. One of the most valuable aspects of following private companies early is gaining insight into where innovation may be heading before those shifts become obvious to the broader market.

Starlink expanded the thesis far beyond aerospace

Today, SpaceX sits at the intersection of communications infrastructure, defense technologies, artificial intelligence, transportation and data connectivity.

That is part of what makes the company so difficult to compare with traditional public market businesses. Most companies fit neatly into sectors. SpaceX increasingly does not.

Its scale advantage in launch technology, combined with its first-mover position in satellite communications, may create a competitive position that becomes increasingly difficult to replicate.

Following the acquisition of EchoStar spectrum, the company’s expansion into direct-to-cell telecom services could potentially position it more directly against terrestrial communications providers.

At the same time, SpaceX’s launch scale and manufacturing capacity may eventually support entirely new infrastructure opportunities, including space-based data infrastructure powered by abundant solar energy and natural cooling.

Whether every part of that vision ultimately materializes remains to be seen. But in our view, the market may still underestimate how many industries SpaceX could ultimately influence.

SpaceX may be one of the first true multi-sector platform companies

At its potential scale, SpaceX could enter public markets as one of the largest and most strategically important companies in the world.

In our view, that reflects a broader shift happening across capital markets.

Over the past two decades, many of the world’s most important growth companies have remained private substantially longer, allowing a greater share of enterprise value creation to occur before public-market investors can participate.

That shift has materially increased the importance of selective private-market investing within a long-term growth framework.

SpaceX also represents something broader: an evolution in market leadership itself.

Historically, the world’s largest companies dominated a single layer of the economy—software, energy, financial systems, or consumer platforms.

Companies like SpaceX may represent a different model entirely: businesses that combine infrastructure, connectivity, intelligence, defense and strategic national importance at global scale.

At its potential scale, SpaceX could eventually enter public markets as one of the largest and most strategically important companies in the world.

The bigger picture

For us, the SpaceX story is ultimately about more than one company. It’s about how investing itself is changing.

Some of the most important companies shaping the next decade may not fit neatly into traditional sectors or become accessible through public markets early in their growth journey. That’s why we believe combining private market access, long-term fundamental research and deep industry work is increasingly valuable.

Our work is to understand where markets and industries may be heading over the next decade, and to build conviction before those changes become obvious to the broader market.

As investors, our job is not only to understand the opportunity, but also the risks. We continue to monitor SpaceX's ability to execute across multiple complex businesses, navigate evolving regulatory frameworks, fund capital-intensive growth initiatives and manage increasing geopolitical and national security exposure. We also evaluate how competition and valuation may evolve as the company's ambitions and market expectations continue to grow.

SpaceX illustrates how transformative innovation can reshape industries, expand markets and create opportunities that are not immediately obvious. Following those changes early— and developing conviction before they become consensus—is at the core of how we invest. SpaceX has been one of those opportunities.