SpaceX Nabs $1B From Google for Satellite Internet

Elon Musk's SpaceX confirmed Tuesday it has received $1 billion in funding from Google to bring satellite Internet to the unconnected.

The funding comes days after SpaceX's biggest competition in the skies, WorldVu, launched OneWeb with funding from Virgin Group and Qualcomm Inc. (Nasdaq: QCOM). (See O3B Founder Taps Virgin, Qualcomm for New Satellites.)

Google (Nasdaq: GOOG) and Fidelity have both invested in SpaceX, acquiring just under 10% of the company and valuing it at $10 billion. They join existing SpaceX investors Founders Fund, Draper Fisher Jurvetson, Valor Equity Partners and Capricorn. SpaceX says the funding will be used to "support continued innovation in the areas of space transport, reusability and satellite manufacturing." (See Comms in Space! Musk Plans Micro-Satellites, Google Leases NASA's Moffett Field.)

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There has been some interesting dynamics in the satellite communications space lately. Greg Wyler, who founded Google-backed satellite company O3b Networks Ltd. , left Google earlier this year to start WorldVu, which was rumored to have close ties to SpaceX. Instead, WorldVu -- now operating as OneWeb -- will tap Virgin Group's LauncherOne to get its satellites into space. For its part, SpaceX has found a powerful partner in Google, whose past attempts at universal coverage haven't panned. (See Google Plans Web of Satellites – Report.)

It appears the lines have been drawn between the two innovative companies, and it will be a race to see who can launch first -- and most successfully. OneWeb has a leg up at present, as it owns rights to the radio spectrum needed to transmit data, and SpaceX does not.

Musk's plans for SpaceX include launching a large number of satellites orbiting at an altitude of around 750 miles. Doing so, however, will cost the company more than $10 billion over five years, Musk has estimated.

Once it has conquered coverage on Earth, the company plans to turn toward Mars.

— Sarah Reedy, Senior Editor, Light Reading