The initial public offering for SpaceX is poised to generate billions of dollars in profits for the fortunate few investors who got in early on Elon Musk’s rocket, satellite and artificial intelligence company.
But beyond that historic wealth event, the massive deal is resetting expectations for the sprawling network of startup firms, venture funds and high-net-worth speculators that dominate private markets for unlisted technology stocks — and for every major IPO that follows in its wake. In particular, Wall Street will be trying to gauge how upcoming blockbuster offerings from artificial intelligence developers OpenAI and Anthropic will be received.
Between the three companies, there’s an IPO pipeline with the potential to eventually bring $3.6 trillion in capitalization onto public markets. Whether there’s enough demand to soak up this flood of new equity without cannibalizing the tech giants that have been leading the market higher for years is an active debate on Wall Street at the moment.
SpaceX, formally known as Space Exploration Technologies Corp., is looking to raise $75 billion at a valuation of about $1.8 trillion, which would make it the biggest IPO Wall Street has ever seen and rank it among the top 10 public companies in the world, bigger even than Musk’s electric-vehicle maker Tesla Inc. The offering is already oversubscribed, with multiple institutional investors looking to buy $10 billion or more of the company’s shares.
The IPO will return piles of capital to private markets that have been starved of liquidity for years. Only 23 venture-backed tech firms went public in 2025, down from 77 just four years earlier, according to data compiled by University of Florida professor Jay Ritter.
“One of the challenges in private markets over the last four or five years has been distributions,” said Matt Witheiler, head of late-stage growth at Wellington Management. “SpaceX will be the first large distribution event to an illiquid private community in a meaningful way in a while. That means more dollars coming back into the private ecosystem.”
The Next Frontier
That the private market revolution is being led by a company focused on cosmic exploration is ironic, considering how few investors were believers when the field was getting started two decades ago. Chad Anderson launched his venture capital firm Space Capital in 2012 and said he initially struggled to find enough limited partners to back his thesis. The firm first bought into SpaceX in 2017 at a roughly $25 billion valuation, and invested another 13 times. He expects to return well over $1 billion to investors with the IPO.
“We’ve been operating in space for decades, but it’s only recently become a category for investment and entrepreneurship, and all of that comes on the heels of SpaceX,” Anderson said. “Without SpaceX, we’re not having this conversation.”
And that’s just a drop in the bucket. Antonio Gracias’s Valor Equity Partners, which invested in SpaceX in 2008, owns a roughly 4% stake worth almost $70 billion at $135 a share. It’s the largest position for Founders Fund, the firm led by Peter Thiel, with that firm’s roughly 3% stake worth more than $50 billion at $135 a share, a person familiar with the matter said. And Sequoia Capital will reap tens of billions from a nearly 1.5% stake, which accounts for its direct investment in the social media firm X, a different person said.
With all this in mind, it’s easy to see why Wall Street is transfixed by SpaceX right now. How the stock trades in its first weeks will ripple across private markets, impacting valuation benchmarks for Anthropic and OpenAI, rearranging Silicon Valley’s implicit venture-fund hierarchies, and determining how much mainstream capital other space-tech companies can attract in SpaceX’s wake.
SpaceX has raised more than $9 billion in venture funding over the last 24 years. Along the way, it’s helped establish the space-tech industry. In 2015, US space-tech firms received $260 million in venture investments. This year, that figure is $5.1 billion through mid-May, according to PitchBook data.
Investors are already moving to back more space-tech startups before SpaceX’s IPO returns hit the market. For example, satellite startup Starcloud is closing a funding round of $200 million or more at a $2 billion pre-money valuation, double its last value, according to a person familiar with the matter. Starcloud didn’t respond to requests for comment.
SpaceX’s Children
Once the stock is listed, tech investors expect more companies to be created by former SpaceX employees. Multiple VCs including Tim Draper, founder of early SpaceX backer Draper Fisher Jurvetson, and Space Capital’s Anderson told Bloomberg they’re specifically targeting SpaceX spinouts with new investments. Anderson said his firm’s limited partners include a sizable number of current and former SpaceX-ers, including some who have committed a portion of their expected returns from the IPO.
Of course, investors won’t see tangible returns from the offering until the staggered lockup period begins weeks after the IPO, starting with its second-quarter earnings. As distributions ramp up through the end of the year, funds that backed SpaceX will have shares to distribute and money to invest. And funds focused on space tech, as well as companies that benefit from SpaceX’s rise — like those that rely on its Starship rocket system — should see increased demand, said PitchBook senior analyst Franco Granda.
Plenty of the capital returned from SpaceX’s IPO is likely to be cycled back into venture firms. Early SpaceX backers like Founders Fund could collect an outsize portion of that, according to Darian Shirazi, managing partner of Google spinout Gradient Ventures and a small angel investor in SpaceX.
On the other hand, funds that haven’t bet on the likes of SpaceX, OpenAI, and Anthropic may have trouble raising their next funds, according to Javier Avalos, chief executive officer of secondary trading platform Caplight Technologies.
“Venture returns are concentrating in just a few companies,” he said. “If you don’t own one of these companies and you’re a venture investor, you can’t raise another fund because your returns won’t keep up. It’s a crazy dynamic.”
The blockbuster IPOs for SpaceX, Anthropic and OpenAI would create record exit activity for VC firms in the US after a dearth of activity in the wake of 2021’s peak. Fundraising then may pick up for VC firms after being stuck in a downtrend since a peak of $413 billion in 2022, according to PitchBook data, though the benefits won’t be immediate and will be contingent on public market reception.
Performance Pressure
While any investor who put money directly into one of SpaceX’s private funding rounds should see significant upside, the same can’t be guaranteed for investors in some convoluted special purpose vehicles, or SPVs. Obscure and opaque SPVs marketing privately-held SpaceX shares have capitalized in recent months as investors scrambled to get in.
Still, the success of SpaceX’s IPO could actually serve to validate SPVs, since many will turn out to be legitimate and reward their backers, said Ross Fubini, managing partner of early-stage venture firm XYZ Venture Capital that’s backed startups including Anduril.
“If you four-times your money quickly, that can look like an easy trade,” he said in an interview. “This can create a phenomenon where people look to do the same with the next company moving down that path.”
Of course, history advises investors to be cautious about counting those winnings before they materialize. Meta Platforms Inc., at the time known as Facebook, unexpectedly slumped after its $16 billion IPO in May 2012, freezing the new-issue market. It was more than a year before another major tech startup went public.
SpaceX is targeting multiples that exceed anything at this scale, far beyond the price-to-sales ratio of highly valued Palantir Technologies Inc. At those levels, there is virtually no margin for error, PitchBook’s Granda said.
The valuation SpaceX commands, and whether it holds, could also shape how public investors price Anthropic and OpenAI. Both companies have confidentially filed to go public, and reportedly could seek IPOs later this year or early in 2027.
So any issues with SpaceX’s trading could make private investors reluctant to agree to sky-high valuations. To some professional investors, sentiment on the viability of private markets itself is hinging on SpaceX’s public performance.
“The market needs a case study of a company that can be private for 20-plus years, raise billions privately and still have juice once they go public,” Caplight’s Avalos said. “What’s the point of buying a new tech issue if they can’t perform well?”
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