Exclusive: Indian family office makes 100X return on SpaceX investment

A well-known New Delhi-based Indian family office has made a near 100x return on an investment it made in 2017 in Space Exploration Technologies Corporation (SpaceX).

The Elon Musk-owned company made a sensational public market debut on Friday at a valuation of $2.1 trillion, emerging as the world’s sixth largest company by market capitalisation after Nvidia, Apple, Alphabet, Microsoft, and Amazon. However, in terms of wealth, Musk has emerged as the only human with over $1.1 trillion in net worth, which includes his stake in Tesla.

“We had invested in a handful of US tech secondaries by purchasing employee stock options (Esop) in the secondary market through our international investment arm in Dubai. We invested a modest sum…not multi-millions,” the founder of the family office, on the condition of anonymity, told Fortune India.

The Space X transaction happened in 2017, when the company was valued at about $21.5 billion. “But since [Esop] secondaries happen at a discount, the investment was done at a valuation of around $18 billion,” says the founder, who hails from one of lndia’s leading business families.

Based on the June 12 valuation of $2.1 trillion, the post dilution multiple is said to be in the 95x-100x range. “We made Space X-like technology bets with a view on the future and their market leadership position. Of course, we had not factored in the "Elon Musk effect" and never even looked at the current valuation as a possible realistic scenario,” tells the founder, who also invests in real estate and has an investment vehicle for India-focused long-term opportunities, including listed equities.

Incidentally, the valuation growth for the family office in SpaceX was quite slow to begin with, before it hit a new stratosphere. Since the initial investment, the Space X valuation was up only 2.14x. Three years later, it was up 7x, surging to 16.3x by 2024 and 37x by 2025. In comparison, since 2017, Nvidia's market cap gain has been 45x, Tesla's 28x, while it’s been 5x for both Amazon and Microsoft, compared to 100x for Space X. “This just reinforces how valuation growth is unpredictable,” says the founder.

The valuation multiple in the coming years, though, will also depend on how fast the core business will scale up.

Can SpaceX grow exponentially?

In 2017, Space X's revenue was $2 billion and in 2026, it's expected to be $23-27 billion. The key inflection point for Space X was the 2020 launch of Starlink, and the rapid expansion of government business during 2023-2025. From 18 rockets in 2017, SpaceX’s current run rate is 170 rockets. In 2017, Starlink, which offers satellite-based internet services, had zero subscribers and today it has 10.3 million subscribers.

In 2010, there were about 1,000 active satellites in the low orbit, and that number for SpaceX is expected to hit 1,700 by the end of this year. “If you apply the equivalent of Moore's Law and looked at the projections of the technology cost curve, one could reasonably look at a scenario of a 10x growth in the satellite population in the coming decade,” says the founder. Last year, there were 11,000 satellites in space, and, as per estimates, the number will touch 14,000 to 16,000 by the year-end.

“Satellite-based communication was a niche business but has expanded dramatically in the past decade and a half. Most people underestimate the space commerce market today. From the current $600-700 billion, it's expected to double by 2030,” says the founder.

Given that Musk believes the Moon could deliver 1,000 terawatts of AI compute power against 1 terawatt of what the earth can provide, investors are, for now, buying into his moonshot story.

“Moon's gravity is one-sixth that of the earth's, so rockets would need far less fuel and could carry larger payloads, launch infrastructure on the moon could be smaller because of lack of population, and materials mined on the moon could be used. Think about orbiting fuel depots, solar powered satellites, and within half a century, a permanent lunar base with humans. All this only reinforces what Bill Gates said: ‘We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten’,” says the founder.

But given the merger of loss-making X into SpaceX and the possibility of Tesla too being subsumed, investors will not exactly be able to buy into a pure-play space exploration and technology company, and neither can they scuttle any plans, since Musk has over 84% voting rights in the company.

Whether the stock will continue to trend higher or face a tumultuous journey similar to that of Tesla is anybody’s guess. But that is something the Indian family office founder is aware of, when he says: “The fortunes of SpaceX as a company and that of its stock will be very different.”