SpaceX Has Redefined the Space Economy

Today, most investors view SpaceX through the lens of a potential IPO and a valuation poised to make it one of the world’s largest companies.

When we first began analyzing it over a decade ago, we were looking at an enterprise still in a much earlier stage of development, whose long‑term potential was far less obvious.

Starlink did not yet exist. The company was primarily focused on reusable rockets and cargo launches, and many investors saw it simply as an aerospace firm with big ambitions.

What captured our interest was a broader perspective: the possibility that a dramatic reduction in the cost of accessing space could fundamentally transform the economics of multiple sectors.

If launch costs fell significantly, this new lower‑cost structure could unlock entirely new business models built on that infrastructure—from communications and defense technologies to data infrastructure and artificial intelligence.

It was precisely this vision that led Franklin Venture Partners (the venture‑investing team within Franklin Equity) to open a dialogue with SpaceX more than ten years ago.

Following Innovation From Its Early Stages Can Change How Investors View the Future

One of the most widespread—but misleading—ideas about private‑market investing is that the real advantage lies in access. In our view, true value comes from the ability to develop a deep, lasting conviction.

Franklin Venture Partners works in close synergy with the public‑equity team at Franklin Equity, enabling continuous sharing of analysis, management access, and thematic research across private and public markets. This collaboration allows us to follow companies closely in their early growth phases, before they become widely understood, publicly‑traded entities.

In the case of SpaceX, our work has included analyzing launch‑frequency improvements, scale advantages in production, the economics of communication infrastructure, and the durability of the company’s technological edge as it evolves.

Our core research team screens hundreds of private companies but invests in only a very narrow subset where we believe market opportunity, execution capability, and long‑term competitive positioning are truly distinctive.

We spent years studying SpaceX before investing in 2022. We wanted to verify whether reusable‑launch technology could consistently improve operating economics, whether Starlink could become a solid communications platform, and whether the firm’s engineering and production advantages would continue to expand over time.

Observing these dynamics and watching the answers emerge was essential to strengthening our conviction.

Following SpaceX on this journey has profoundly shaped how we analyze sectors far beyond aerospace. One of the greatest benefits of early monitoring of private companies is the ability to anticipate the direction of innovation before those changes become evident to the broader market.

Starlink Expanded the Investment Thesis Well Beyond Aerospace

Today, SpaceX sits at the intersection of communications infrastructure, defense technologies, artificial intelligence, transportation, and data connectivity.

This very convergence makes the company difficult to compare with traditional listed peers: while most firms fit neatly into specific sectors, SpaceX increasingly defies such classification.

Its scale advantage in launch technology, combined with a first‑mover position in satellite communications, could translate into a competitive moat that is ever harder to replicate.

Following EchoStar’s spectrum acquisition, the expansion into direct‑to‑cell telecom services could also bring the firm into more direct competition with terrestrial network operators. At the same time, SpaceX’s launch capacity and production scale could eventually enable new infrastructure opportunities, such as space‑based data‑processing systems powered by abundant solar energy and natural cooling.

Whether all of these prospects will fully materialize remains to be seen. Nevertheless, we believe the market may continue to underestimate the number of sectors SpaceX is poised to influence.

SpaceX Could Become One of the First True Multi‑Sector Platforms

At the scale it could eventually achieve, SpaceX possesses all the characteristics needed to emerge in public markets as one of the world’s largest and most strategically important companies.

In our view, this reflects a broader shift occurring in capital markets.

Over the past two decades, many high‑growth companies have remained private for substantially longer periods, allowing a growing share of created value to develop before investors gain access via public markets.

This evolution has markedly increased the role of selective private‑market investments within long‑term growth‑oriented strategies.

SpaceX also represents something larger: an evolution in the very concept of market leadership.

Historically, the world’s biggest firms dominated a single layer of the economy—software, energy, financial systems, or consumer platforms. Companies like SpaceX appear to embody an entirely different model: enterprises that integrate infrastructure, connectivity, intelligence, defense, and global strategic relevance.

If it reaches the hypothesized scale, SpaceX could therefore establish itself in public markets as one of the most massive and strategically significant corporations worldwide.

The Big Picture

For us, SpaceX’s story goes far beyond a single company; it pertains to the evolution of the investment process itself.

Some of the firms that will shape the next decade may not fit traditional sector classifications, nor become accessible to public markets in the early stages of their growth. For this reason, we increasingly view the combination of private‑market access, long‑term foundational research, and deep industry knowledge as a strategic imperative.

Our goal is to anticipate the direction in which markets and industries will move over the next ten years, building a solid conviction before those shifts become evident to the broader market.

As investors, our role is not only to assess opportunities but also to evaluate risks. We continue to monitor SpaceX’s ability to operate successfully in complex, diversified businesses, adapt to evolving regulatory environments, sustain capital‑intensive growth initiatives, and manage growing exposure to geopolitical and national‑security dynamics. Simultaneously, we analyze how competition and valuations may evolve as the company’s ambitions and market expectations rise.

SpaceX is a concrete example of how disruptive innovation can transform entire sectors, expand markets, and generate opportunities that are not immediately obvious. Identifying these changes early—and developing a strong conviction before they become consensus—is at the heart of our investment approach. SpaceX was one such opportunity.

by Grant Bowers, Portfolio Manager, and James Cross, Co‑Head of Private Investing at Franklin Equity.