SpaceX’s Super Heavy booster is seen at the launch site, as the Starship is ready to be placed aloft, at the company’s Boca Chica facility, ahead of the eighth Starship test flight scheduled for March 3, from Starbase, near Brownsville, Texas, US March 2, 2025.
Kaylee Greenlee | Reuters
For nearly two decades, some of the world’s most prominent investors have quietly amassed stakes in SpaceX while the rocket maker remains largely barred from public markets.
Now, as Elon Musk’s company seeks to raise nearly $1.8 billion in its initial public offering, that early bet is poised to generate one of the biggest paper gains in venture capital history.
Among the biggest beneficiaries are veteran stock picker Ron Baron, Cathie Wood’s Ark Invest and mutual fund giant Fidelity Investments. Also in the running to win are venture firms including Founders Fund, Sequoia Capital and Andreessen Horowitz and hedge funds such as D1 Capital Partners and Coatue Management. Selected pension funds and endowments are also planned to participate in the end.
The returns are impressive for investors who backed SpaceX before its success was realized. Baron began investing in 2017 through employee tender offers when the company was valued at less than $22 billion and has participated in 27 rounds of funding.
By the end of March, SpaceX had invested 33% of assets in the $10.4 billion Baron Partners Fund and 25.5% of the Baron Asset Fund, making it one of the company’s most important investments.
“We think SpaceX is going to be the biggest, most profitable company in the world,” Baron said during an investor webcast this week. His company has invested about $2 billion in the company over the years, a stake that has grown to $12 billion, he said.
It is still in the early stages of its value creation
Wood’s Ark Venture Fund and has been a major beneficiary of SpaceX’s rapid rise. The rocket maker made up 11.4% of the fund’s net assets as of March 31, making it the largest company in the portfolio.
Wood said Ark views SpaceX as much more than a launch provider. “Through Starship, Starlink and the acquisition of xAI, we believe SpaceX is building the right AI infrastructure to drive the largest space economy,” he told CNBC.
The investment also reflects Ark’s broader thesis about technological convergence. SpaceX sits at the intersection of several of the firm’s core themes, including artificial intelligence, robotics and energy storage. Wood believes the company’s next phase of growth could be driven not only by its existing Falcon 9 launch business and the Starlink satellite network, but also by Starship, the next-generation rocket system that could open up new commercial opportunities in space.
“For long-term shareholders, the IPO will provide broader access to a company that we believe remains ahead of the curve,” Wood said.
Ark Venture fund for 1 year
No traditional asset manager is likely to benefit more from SpaceX’s rise than Fidelity Investments. The Boston-based company was entered early by former portfolio manager Gavin Baker, who began buying shares in 2015 when SpaceX was worth about $10 billion.
As of March 31, SpaceX held 4.7% of the $177 billion Fidelity Contrafund, one of the largest mutual funds in the world. The firm also represents 3.3% of the $103 billion Fidelity Blue Chip Growth Fund and 2.6% of the nearly $99 billion Fidelity Growth Company Fund.
Fidelity declined to comment for this story.
Aces appear
Extraordinary profits not only reflect the growth of the company, but also the lack of access.
“They were taking a chance on Elon, and they got aces,” said Greg Martin, founder and managing director of Rainmaker Securities. “When they got a chance at Elon, the long-term cap table space turned out to be very scarce because the cap table is tightly regulated.” A cap table, or capitalization table, refers to the written division of a company’s ownership.
Unlike many venture-backed companies that tend to expand their shareholder base, SpaceX has maintained tight control over who can invest, Martin said. As a result, early stage investors often have opportunities to participate in later funding rounds that were not available to many institutions.
“Their early bet on Elon not only paid off their initial investment, but enabled them to invest more when the business became a clear success,” Martin said.
That flexibility helped turn modest early investments into multibillion-dollar positions. Venture firm Founders Fund first backed SpaceX in 2008, while hedge funds such as Coatue and D1 gained exposure in recent private equity rounds.
“Our success is almost always thinking about all the things other people are doing that don’t make sense, and just, hopefully, doing those, it’s like 75% of the work,” said Philippe Laffont, founder of Coate Management, at the Global Alts conference in New York this week.
Pensions and endowments
Pension funds and university endowments are also poised to reap big gains from the start of SpaceX, underscoring how the company’s rise has rewarded institutions responsible for funding retirees, scholarships and academic research.
The Ontario Teachers’ Pension Plan invested more than $200 million in SpaceX in 2019 through a technology-focused investment vehicle at the time. At the time, the pension manager described SpaceX as a “compelling investment opportunity” because of its “proven history of technological disruption in the launch space and huge potential for future growth in the satellite broadband market.”
University endowments also emerged as major beneficiaries. Washington University in St. Louis invested about $50 million in SpaceX nearly a decade ago, a stake that has grown in value as the company climbs toward its IPO valuation. The university’s holdings are now more than 10% of the university’s nearly $17 billion in revenue, according to Bloomberg News.
Washington University declined to comment, and the Ontario Teachers’ Pension Plan did not respond to CNBC’s request for comment.
Correction: An earlier version misstated SpaceX’s stake in the Baron Asset Fund. It is 25.5%.
