Before SpaceX IPO, investors in China secretly acquired stakes

SpaceX Received Investments From Entities With China and Qatar Ties Before Public Offering

A previously unreported SpaceX investor maintained connections to Chinese military contractors. An entity associated with the Qatari royal family also acquired a stake. These details emerged from a private investor list obtained by ProPublica that identifies overseas participants in SpaceX funds prior to the company’s initial public offering.

SpaceX restricted investors from China and Hong Kong from purchasing shares in its IPO last week, citing regulatory and compliance risks, according to Bloomberg. The company’s business includes contracts for U.S. government work such as spy satellites for the Pentagon. U.S. government policy subjects foreign investment in sensitive sectors to review, though no outright prohibition exists on Chinese investment in U.S. military contractors.

The records identify at least a dozen investors with addresses in mainland China, Hong Kong, or Russia who purchased interests in SpaceX between 2018 and 2021 through Tomales Bay Capital, a U.S. firm. Individual investments ranged from $800,000 to $40 million.

One transaction involved an entity owned by David Su, co-founder of the Beijing venture capital firm MPCi. The entity invested $15 million in a SpaceX fund in 2020. MPCi has backed Chinese satellite companies, two of which received U.S. sanctions for alleged assistance to the Wagner Group; one faced additional sanctions last month for alleged support to Iranian operations against U.S. forces. MPCi has also partnered with Chinese government investment funds on aerospace projects, according to China’s Ministry of Science and Technology.

MPCi stated that Su received no nonpublic SpaceX information. The firm described Su as a Singapore citizen residing in Singapore and noted that he manages U.S. dollar funds. A 2024 profile indicated Su spent nearly all of the prior 20 years in China.

A lawyer for Tomales Bay Capital stated that the firm provided no non-public sensitive information about SpaceX to investors. The investors functioned as passive limited partners and received only standard fund financials, including quarterly valuations. The lawyer added that the majority of investors on the list are not citizens of Russia or China and none are agents of those countries, though some may list foreign mailing addresses while holding citizenship elsewhere.

SpaceX did not respond to inquiries. One sanctioned Chinese satellite company, Spacety, previously denied involvement with the Wagner Group.

All investors identified by ProPublica in China or Russia appeared to be business owners or their family members. The documents originated from a Delaware corporate dispute involving Tomales Bay Capital and were unsealed this month following a motion by ProPublica supported by the Reporters Committee for Freedom of the Press and the law firm Shaw Keller. Tomales Bay Capital appealed to the Delaware Supreme Court, which upheld the release.

Tomales Bay Capital is led by Iqbaljit Kahlon, who has maintained close ties to SpaceX operations. SpaceX Chief Financial Officer Bret Johnsen testified that Kahlon had been associated with the company longer than Johnsen’s own 15-year tenure. Before the IPO, Kahlon purchased SpaceX shares and repackaged them into funds sold to outside investors.

In 2021 meeting minutes later entered into court records, Kahlon offered one prospective Chinese investor quarterly business updates, visits to SpaceX facilities, and opportunities to interview the company’s CFO.

The list adds names to previously reported Chinese investments in SpaceX. Among identifiable participants are Indian politician Abhishek Singhvi, former U.S. Education Secretary Betsy DeVos, and a British Virgin Islands entity linked to Indonesian billionaires. Other entries consist of shell companies whose beneficial owners are not disclosed in the records.

One such vehicle, Delaware LLC HAL9001 Partners Fund I, invested approximately $10 million in a SpaceX fund in 2020. Incorporation documents were signed by venture capitalist Roman Sobachevskiy. The Treasury Department earlier fined a firm co-owned by Sobachevskiy hundreds of millions of dollars for managing an investment on behalf of a sanctioned Russian oligarch. Sobachevskiy has not faced personal accusations. A Tomales Bay Capital spokesperson stated the oligarch had no involvement in the SpaceX transaction. Sobachevskiy did not respond to questions about the source of funds.

The records also document Qatar-linked investments. Funds connected to Bracket Capital, which maintains offices in Los Angeles, London, and Qatar, committed roughly $48 million across multiple transactions from 2017 to 2020. An email from Kahlon to SpaceX’s CFO indicated Bracket held capital from the Qatari royal family. A separate entity, AM FIG Cayman Limited, listed a Doha address and invested about $10 million in 2020. The documents do not identify whether Bracket acted for the royal family or other clients.

In a 2021 text message to a Bracket employee, Kahlon referenced sending Yalda Aoukar, Bracket’s co-founder, to speak with a “big guy” for a potential “bail out.” Bracket did not respond to requests for comment.

The stakes represented small percentages of SpaceX equity yet benefited from valuation growth from $33.3 billion in 2019 to $2.7 trillion as of the most recent reported figure. Last year ProPublica reported that SpaceX permitted Chinese investors to participate when funds were routed through offshore jurisdictions such as the Cayman Islands.