Early SpaceX investors will now reap the rewards

For nearly two decades, some of the world’s most prominent investors quietly accumulated stakes in SpaceX while the rocket maker remained largely off-limits to the public markets.

Now, with Elon Musk‘s company seeking a valuation of roughly $1.8 trillion in its initial public offering, those early bets are poised to generate some of the largest paper gains in venture capital history.

Among the biggest beneficiaries are veteran stock picker Ron Baron, Cathie Wood’s Ark Invest and mutual fund giant Fidelity Investments. Also poised to win are venture firms including Founders Fund, Sequoia Capital and Andreessen Horowitz as well as hedge funds such as D1 Capital Partners and Coatue Management. Select pension funds and endowments are also set to share in the windfall.

The gains are striking for investors who backed SpaceX before its success became obvious. Baron first invested in 2017 through employee tender offers when the company was valued at less than $22 billion and has since participated in 27 funding rounds.

By the end of March, SpaceX accounted for 33% of assets in the $10.4 billion Baron Partners Fund and 23% of the Baron Asset Fund, making it one of the firm’s most consequential investments.

“We think that SpaceX will become the largest, most profitable company on the planet,” Baron said during an investor webcast this week. His firm has invested about $2 billion in the company over the years, a stake that has grown to roughly $12 billion, he said.

Still early in its value creation

Wood’s Ark Venture Fund has also been a major beneficiary of SpaceX’s rapid rise. The rocket maker accounted for 11.4% of the fund’s net assets as of March 31, making it the largest holding in the portfolio.

Wood said Ark views SpaceX as far more than a launch provider. “Through Starship, Starlink and the acquisition of xAI, we believe SpaceX is building vertically integrated AI infrastructure for a much larger space economy,” she told CNBC.

The investment also reflects Ark’s broader thesis around technological convergence. SpaceX sits at the intersection of several of the firm’s core innovation themes, including artificial intelligence, robotics and energy storage. Wood believes the company’s next phase of growth could be driven not only by its existing Falcon 9 launch business and Starlink satellite network, but also by Starship, the next-generation rocket system that could open new commercial opportunities in space.

“For long-term shareholders, an IPO would provide broader access to a company that we believe remains early in its value creation,” Wood said.

No traditional asset manager may…