Among the foreign investors who bought shares in SpaceX when it was still a private company were businessmen with ties to Chinese military contractors. Companies linked to the Qatari royal family also invested.
The new details, which come from a list of private investors obtained by ProPublica, shed light on a particularly sensitive issue for Elon Musk’s rocket company: who and how people from countries such as China bought it. SpaceX built its business on sensitive U.S. government work, such as building reconnaissance satellites for the Department of Defense. Although Chinese investments in U.S. military contractors are not prohibited, such investments are highly regulated.
In a sign of its sensitivity to this concern, SpaceX last week banned investors in China and Hong Kong from buying shares in its initial public offering, citing “regulatory and compliance risks,” Bloomberg reported. The U.S. government claims China has a strategy of using investments in sensitive industries for espionage and access to cutting-edge technology.
The company’s IPO last week was the largest ever, making Musk the world’s first trillionaire. Mr. Musk has extensive business interests in China, where Tesla makes many of its cars.
The new records detail at least 12 investors with addresses in mainland China, Hong Kong or Russia who acquired shares in SpaceX several years ago through a U.S. brokerage firm called Tomales Bay Capital. The investments were relatively small, ranging from $800,000 to $40 million, and were made between 2018 and 2021.
One of the investments came from a company owned by David Su, co-founder of the prominent Beijing venture capital firm MPCi. According to the investor list, Su companies invested $15 million in the SpaceX fund in 2020. This wasn’t Su’s only foray into the space industry. His company is also a prominent backer of some of SpaceX’s Chinese competitors. Two satellite companies in which Su’s company invested have been sanctioned by the U.S. government for allegedly supporting the Wagner Group, a notorious Russian mercenary organization. One of those companies was again sanctioned last month for allegedly supporting Iranian attacks on U.S. forces during the war.
MPCi also cooperates with Chinese government investment funds. Last year, China’s Ministry of Science and Technology website named Su’s company as a partner in a state-backed effort to develop the country’s aerospace industry.
There is no evidence that Mr. Hsu did anything wrong. But the key question from the U.S. government’s perspective will be whether China-based investors had access to nonpublic information about SpaceX’s technology and strategy, said Sarah Bauerle Danzmann, an Indiana University professor who has worked at the State Department scrutinizing foreign investments. “If an investor has a conflict of interest with another company in China and could provide that information to a competitor, that could be a national security concern,” she said.
MPCi said in a statement that Hsu “has not received any non-public information regarding SpaceX.” The statement described Mr Su as a “Singaporean citizen residing in Singapore,” adding: “MPCi is a brand name with various teams and funds. Mr Su is responsible for the US dollar funds.” According to his 2024 profile, Mr. Su has “spent almost 100 percent of his time in China over the past 20 years.”
An attorney for Tomales Bay Capital said in a statement that the company “does not provide investors with non-public and confidential information about SpaceX.” He said the investors were passive limited partners and that “other than the fund’s financial information, including quarterly valuations, Tomales Bay investors have not received any further information about SpaceX.”
“Most, if not all, of the investors included in the Unsealed Tomales Bay Investor List are not nationals of foreign enemy states, including Russia or China, and certainly none of them are agents of Russia, China, or any other foreign enemy state,” attorney Ryan Stonerock said in a statement. He added that some investors “may have mailing addresses listed” in Russia or China but do not actually live there and are “actually nationals or residents of other countries that are not enemies of the United States or a foreign country.”
SpaceX did not respond to questions. Spaity, one of the Chinese space companies sanctioned by the U.S. government, previously denied supporting the Wagner Group.
All of the investors identified by ProPublica in China or Russia appear to be wealthy businessmen or their children.
The new documents emerge from a Delaware corporate dispute involving Tomales Bay Capital. The court records were unsealed this month after ProPublica moved to make them public with the help of the Committee for a Free Press and attorneys from the law firm Shaw Keller. Tomales Bay Capital appealed to the Delaware Supreme Court, which ruled in ProPublica’s favor.
Tomales Bay Capital is run by an investor named Iqbaljit Kahlon, who has been close to SpaceX’s management for years and was involved in the company’s operations. Chief Financial Officer Brett Johnsen, who has worked at SpaceX for 15 years, testified that Kahlon “has been with the company in some form or fashion longer than I have.”
Before SpaceX went public, Kahlon made his fortune acting as an intermediary for investors who wanted to add the rocket company to their portfolios. His company regularly bought SpaceX stock, bundled it into investment funds, and charged fees to investors who bought parts of those funds.
In his pitch to one potential Chinese investor in 2021, Kahlon promised special access to SpaceX, including quarterly updates on the company’s business developments and “a visit to SpaceX and the opportunity to meet with SpaceX’s CFO,” according to meeting minutes later entered into court records.
ProPublica and other news outlets have previously reported on the presence of Chinese investors in SpaceX, but the identities of most of the rocket company’s investors have been closely guarded. Kahlon’s investor list adds hundreds of names to the public picture of who owns SpaceX. The list details several Tomales Bay Capital Fund investments that have acquired SpaceX stock. Some Funds may also own stock in other companies.
Some of the SpaceX investors listed on Kahlon’s ledger are easy to identify. Indian politician Abhishek Singhvi. Betsy DeVos, former U.S. Secretary of Education. A British Virgin Islands company owned by an Indonesian billionaire. However, other companies on the list are shell companies whose ultimate owners remain hidden.
One such company is a Delaware LLC called HAL9001 Partners Fund I, which invested about $10 million in the SpaceX fund in 2020. HAL9001’s formation documents were signed by venture capitalist Roman Sobachevsky. The Treasury Department recently fined a company co-owned by Mr. Sobachevsky hundreds of millions of dollars for managing separate investments on behalf of a sanctioned Russian oligarch. Mr. Sobachevsky has not been personally accused of wrongdoing.
A Tomales Bay Capital spokesperson said the oligarch was “not involved in the investment.” Sobachevsky declined to answer questions about who financed SpaceX’s investment, among other questions.
The record also sheds light on the ties between SpaceX and Qatar. The funds, part of Brackett Capital, an investment firm with offices in Los Angeles, London and Qatar, invested about $48 million in a series of transactions between 2017 and 2020, according to documents. Brackett receives funding from the Qatari royal family, according to an email Kahlon sent to SpaceX’s chief financial officer. The ledger also lists Doha, Qatar, as an address for a mysterious entity called AM FIG Cayman Limited, which invested about $10 million in 2020.
The documents do not specify whether Brackett’s investments were made on behalf of the royal family or other clients. In 2021, as Kahlon was soliciting backers for a further deal with SpaceX, he texted a Brackett employee: “Ultimately we’re just going to send Yalda in to talk to the big guys. We need bailouts lol.” (Yalda Aucar is a co-founder of Bracket. It is unclear whether “big man” refers to a member of the royal family or what Kahlon means by “relief.”)
Brackett did not respond to requests for comment.
The investment on the ledger is a small portion of SpaceX’s investment, but it would have provided a windfall. The company’s valuation has exploded in recent years, from $33.3 billion in 2019 to $2.7 trillion as of Wednesday morning.
Last year, ProPublica reported on SpaceX’s unusual approach to accepting funding from Chinese investors. According to testimony in the Delaware lawsuit, the company allowed Chinese investors to buy SpaceX stock as long as the funds were routed through the Cayman Islands and other secret offshore locations.
