SpaceX raises $1 billion from Google, Fidelity

SpaceX has raised a $1 billion financing round from Google and Fidelity, which now own just under 10 percent of the ambitious space startup.

The investment comes days after SpaceX CEO Elon Musk announced plans to build a fleet of small satellites that would bring internet to underserved regions of the world. While the satellites cost far less to produce than their larger, traditional cousins currently favored by telecommunications companies, SpaceX will still need hundreds of millions of dollars to produce 700 of them.

My colleague Kevin Fitchard recently outlined how Musk believes these satellites can create a stronger, faster internet network by bouncing data around the globe much more quickly than if it had to travel by cable. He writes:

Though any traffic would have to got through the Earth’s atmosphere twice, once that data stream is 750 miles up, it would make only a few satellite hops across a near vacuum, through which electromagnetic waves travel much faster than through a fiber optic cable. So what Musk is promising to do is not only build an internet to connect the furthest corners of the planet, but a create a network that would draw those far corners much closer together.

SpaceX had previously raised $245.5 million from investors like Founders Fund, Draper Fisher Jurvetson, Valor Equity Partners and Capricorn. Each rocket or spacecraft costs hundreds of millions of dollars to develop and millions to launch, so it’s not surprising that SpaceX is interested in such huge rounds. The startup has lofty ambitions even beyond its satellite fleet, such as sending humans to Mars, which will require a huge investment in research and development over the coming decade.

Google actually already has its own experimental aerial internet program. It’s called Project Loon, and it relies on balloons. It acquired satellite imaging company Skybox last year.