SpaceX stake purchases by China-linked investors revealed

Newly unsealed records show that at least a dozen investors with addresses in mainland China, Hong Kong or Russia acquired stakes in SpaceX years before the company’s initial public offering, using a U.S. middleman that packaged shares into investment funds.

The details come from a private investor list obtained by ProPublica and from court records in a Delaware corporate dispute involving Tomales Bay Capital, a firm run by investor Iqbaljit Kahlon. The investments described in the records ranged from $800,000 to $40 million and were made between 2018 and 2021.

The disclosures add to scrutiny around who bought into Elon Musk’s rocket company while it was still private. SpaceX built its business on sensitive U.S. government work, including making spy satellites for the Pentagon. The source article says there is no ban on Chinese investment in U.S. military contractors, but such investment is heavily regulated.

Last week, SpaceX barred investors from China and Hong Kong from buying shares in its IPO because of "regulatory and compliance risks", Bloomberg reported, according to the source material. The IPO was the largest ever and made Musk the world’s first trillionaire, the source article said.

Investors identified in newly public records

Among the investors listed was an entity owned by David Su, co-founder of the Beijing venture capital firm MPCi. According to the investor list, the Su entity invested $15 million in a SpaceX fund in 2020.

The source article says Su’s company has also backed some of SpaceX’s Chinese competitors and that two satellite companies his firm invested in were sanctioned by the U.S. government for allegedly assisting the Wagner Group. One of those companies was sanctioned again last month for allegedly helping Iran attack U.S. military forces during the war. The source also says MPCi has worked with Chinese government investment funds and that China’s Ministry of Science and Technology named Su’s firm as a partner in a state-backed aerospace effort last year.

"There is no evidence that Su did anything improper", the source article said. It also quoted Sarah Bauerle Danzman, an Indiana University professor who has worked for the State Department scrutinizing foreign investments, on the issue raised by such holdings.

"If an investor has conflicts of interests with other companies in China - if they could feed that information to competitors - it could be a national security concern", she said.

In a statement, MPCi said that Su "has not received any nonpublic information of SpaceX." The statement described Su as "a Singapore citizen who resides in Singapore", adding: "MPCi is a brand name with different teams and funds. Mr. Su is responsible for the US dollar funds."

According to a 2024 profile cited in the source, Su "spent almost 100 per cent of his time in China over the last 20 years."

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Tomales Bay’s role and what investors were told

Tomales Bay Capital regularly bought SpaceX stock, pooled it into investment funds and charged fees to investors who bought interests in those funds, according to the source article. Kahlon had longstanding ties to SpaceX leadership and operations. SpaceX CFO Bret Johnsen testified that Kahlon "has been with the company in one form or fashion longer than I have."

In a 2021 pitch to a potential investor in China, Kahlon promised access tied to the company, according to meeting minutes that later appeared in court records. The source article says he offered quarterly updates on SpaceX’s business development, "visits to SpaceX, and the opportunities to interview with Space X’s CFO", according to the meeting minutes.

A lawyer for Tomales Bay Capital, Ryan Stonerock, said in a statement that the firm "has not provided any non-public, sensitive information regarding SpaceX to investors." He said the investors are passive limited partners: "Aside from fund financials that include quarterly valuations, Tomales Bay’s investors have not received any further information regarding SpaceX."

Stonerock also said, "The vast majority, if not all, of the investors included on the unsealed Tomales Bay investor list are not citizens of any foreign adversary, including Russia or China", and "certainly none of them are agents of Russia or China, or any other foreign adversary." He added that some investors "may have mailing addresses listed" in Russia or China but do not actually live there "and are in fact citizens and residents of the United States or other countries that are not foreign adversaries."

SpaceX did not respond to questions, according to the source article.

Other investors and offshore structures

The records also identify other notable investors. One was HAL9001 Partners Fund I, a Delaware LLC that invested roughly $10 million in a SpaceX fund in 2020. Its incorporation documents were signed by venture capitalist Roman Sobachevskiy, the source article said. It also said the Treasury Department recently fined a company co-owned by Sobachevskiy hundreds of millions of dollars for managing a different investment on behalf of a sanctioned Russian oligarch, while noting that Sobachevskiy has not been personally accused of wrongdoing.

A Tomales Bay Capital spokesperson said that the oligarch "had no involvement with the investment."

Some SpaceX investors on the ledger were easier to identify, including Abhishek Singhvi, Betsy DeVos and a British Virgin Islands company owned by Indonesian billionaires, according to the source article. Others were shell companies whose ultimate owners remain hidden.

The source article also says SpaceX previously allowed Chinese investors to buy stakes so long as the money was routed through the Cayman Islands or other offshore secrecy hubs.

Qatar-linked money also appeared on the ledger

The newly public documents also shed light on ties between SpaceX investments and Qatar. Funds affiliated with Bracket Capital invested about $48 million through a series of deals from 2017 through 2020, the records show. According to an email Kahlon sent to SpaceX’s CFO, Bracket had money from the Qatari royal family.

The ledger also lists Doha, Qatar, as the address for AM FIG Cayman Limited, which invested around $10 million in 2020.

The documents do not specify whether Bracket’s investments were made on behalf of the royal family or another client. In 2021, while seeking backing for another SpaceX deal, Kahlon texted a Bracket employee: "At the end we can just send Yalda to talk to big guy. We need a bail out lol."

The source article identifies Yalda Aoukar as Bracket’s co-founder and says it was unclear whether "the ‘big guy’ refers to a member of the royal family and what Kahlon meant by ‘a bail out.’"

Bracket did not respond to requests for comment, according to the source article.

Court fight opened the records

The investor list emerged from a Delaware court battle over Tomales Bay Capital. The records were unsealed this month after ProPublica moved to make them public, with help from the Reporters Committee for Freedom of the Press and Shaw Keller. Tomales Bay Capital appealed to the Delaware Supreme Court, which ruled in favor of ProPublica, the source article said.

The investments were tiny percentages of SpaceX, but the source article says they would have produced large gains as the company’s valuation rose from $33.3 billion in 2019 to $2.7 trillion as of Wednesday morning.

One Chinese space company sanctioned by the U.S. government, Spacety, "previously denied" providing support to the Wagner Group, according to the source article.

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