News that Elon Musk’s SpaceX has raised $75bn in a record initial public offering (IPO), which values the satellite, rockets and artificial intelligence company at $1.77 trillion, will have wide-ranging implications for the space sector and industrial gases industry.
Mark Boggett, CEO of space investment firm Seraphim Space, said the IPO is a landmark moment for the space economy. For context, it is three times the size of Saudi Aramco’s IPO in 2019.
“More than simply attracting additional venture capital, it would further establish space as a mainstream investment category and provide public market investors with a highly visible benchmark for the sector’s potential,” he said.
“We would expect a listing to increase interest from a broader range of investors, including generalist venture capital firms that may previously have had limited exposure to the sector. Historically, category-defining companies have drawn new investors into adjacent parts of their ecosystems as they seek exposure to the next generation of growth opportunities.”
©SpaceX
For the industrial gases sector, aerospace and AI lie in the sweet spot of emerging opportunities, with both dependent on specialty gases.
The rapid growth of AI and commercial space programmes is creating a new wave of demand for high-purity industrial gases, said Messer CEO Bernd Eulitz at the .
“The launches of the space industry are increasing at a speed that is phenomenal,” he said. “SpaceX, for example, has roughly 9,000 satellites in orbit. They want to go to 30,000. When you do the math with all the other companies, we’re looking at 100,000 satellites in orbit soon.”
The exponential scaling of commercial space launches and advanced aerospace manufacturing is forcing gas majors to rethink their strategies.
Linde has indicated the sector could eventually become large enough to be treated within its reporting structure.
When you drill down into the space economy, there are a multitude of other sectors too, such as critical infrastructure spanning defence and security applications, communications, earth observation, navigation, energy, and climate intelligence. Many, if not all, require chips to power their operations.
SpaceX says its three key pillars – space, connectivity and AI – address a $5.7 trillion market.
Amid the current market buzz, there are concerns over its valuations and aggressive expansion. It carries $29.1bn in long-term debt.
“While launch and connectivity currently capture much of the public attention, a significant proportion of future value creation is likely to occur in the applications, intelligence, and infrastructure layers,” added Boggett.
“In our view, a SpaceX IPO would shine a spotlight on this wider ecosystem and help accelerate capital flows towards the next generation of category-leading space tech companies.”
Despite the recent launchpad setback with – which may also have implications for future space programmes – the SpaceX IPO underlines the huge interest in aerospace. Industrial gases, particularly liquid oxygen, liquid hydrogen, helium and nitrogen, are all pivotal to space missions.
