Before SpaceX IPO, Investors in China Secretly Acquired Stakes

A businessman with ties to Chinese military contractors was among the overseas investors who acquired stakes in SpaceX while it was still a private company. An entity linked to the Qatari royal family also took a stake.

The new details come from a private investor list obtained by ProPublica that sheds light on a particularly delicate issue for Elon Musk’s rocket company: which people in countries like China bought into the company, and how. SpaceX built its business off sensitive U.S. government work like making spy satellites for the Pentagon. While there is no ban on Chinese investment in U.S. military contractors, such investment is heavily regulated.

In a sign of its sensitivity to the concerns, SpaceX barred investors from China and Hong Kong from buying shares in its initial public offering last week due to “regulatory and compliance risks,” Bloomberg reported. The U.S. government alleges that China has a strategy of using investments in sensitive industries for espionage and to get access to cutting-edge technology. 

The company’s IPO last week was the largest ever, making Musk the world’s first trillionaire. Musk has extensive business interests in China, where Tesla builds many of its cars.

The new records detail at least a dozen investors with addresses in mainland China, Hong Kong or Russia who acquired stakes in SpaceX years ago through a middleman firm in the U.S. called Tomales Bay Capital. The investments are relatively small, ranging from $800,000 to $40 million, and were made between 2018 and 2021.

One investment came from an entity owned by David Su, the co-founder of the prominent Beijing venture capital firm MPCi. The Su entity invested $15 million in a SpaceX fund in 2020, according to the investor list. It was not Su’s only foray into the space industry; his company has been a high-profile backer of some of SpaceX’s Chinese competitors. Two satellite companies that Su’s firm invested in were sanctioned by the U.S. government for allegedly assisting the notorious Russian mercenary organization the Wagner Group. One of the companies was sanctioned again last month for allegedly helping Iran attack U.S. military forces during the war. 

MPCi has also worked with Chinese government investment funds. Last year, the website for China’s Ministry of Science and Technology named Su’s firm as a partner in a state-backed effort to develop the country’s aerospace industry. 

There is no evidence that Su did anything improper. But the key question from the U.S. government’s perspective would be whether China-based investors got access to nonpublic information about SpaceX’s technology or strategies, said Sarah Bauerle Danzman, an Indiana University professor who has worked for the State Department scrutinizing foreign investments. “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 of him, Su “spent almost 100 per cent of his time in China over the last 20 years.”

A lawyer for Tomales Bay Capital 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.”

“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,” said the lawyer, Ryan Stonerock, “and certainly none of them are agents of Russia or China, or any other foreign adversary.” He added that some of the 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. One of the Chinese space companies sanctioned by the U.S. government, Spacety, previously denied providing support to the Wagner Group. 

All the investors located in China or Russia that ProPublica identified appeared to be either wealthy businesspeople or their children. 

The new documents come from a corporate dispute in Delaware involving Tomales Bay Capital. The court records were unsealed this month after ProPublica moved to make them public, with the help of attorneys from the Reporters Committee for Freedom of the Press and the law firm Shaw Keller. Tomales Bay Capital appealed to the Delaware Supreme Court, which ruled in favor of ProPublica.

Tomales Bay Capital is run by an investor named Iqbaljit Kahlon, who has long been close to SpaceX’s leadership and even involved in the company’s operations. SpaceX CFO Bret Johnsen, who’s worked there for 15 years, testified that Kahlon “has been with the company in one form or fashion longer than I have.”

Before SpaceX went public, Kahlon made a fortune by acting as a middleman for investors hoping to add the rocket company to their portfolio. His firm regularly bought SpaceX stock, packaged it into investment funds and then charged fees to investors who bought pieces of those funds. 

In a 2021 pitch to one potential investor in China, Kahlon promised special access to SpaceX, including quarterly updates on the company’s business development, “visits to SpaceX, and the opportunities to interview with Space X’s CFO,” according to the meeting minutes, which later appeared in court records.

While ProPublica and other outlets have previously reported on the existence of Chinese investors in SpaceX, the identities of most of the rocket company’s investors have been closely guarded. The Kahlon investor list adds hundreds of names to the public picture of who owns SpaceX. The list details investments in several Tomales Bay Capital funds that have acquired SpaceX stock; it is possible that some of the funds own stakes in other companies too.  

Some of the SpaceX investors on Kahlon’s ledger are easy to identify: the Indian politician Abhishek Singhvi; Betsy DeVos, the former U.S. secretary of education; a British Virgin Islands company owned by Indonesian billionaires. But others 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 roughly $10 million in a SpaceX fund in 2020. The incorporation documents for HAL9001 were signed by the venture capitalist Roman Sobachevskiy. The Treasury Department recently fined a company that was co-owned by Sobachevskiy hundreds of millions of dollars for managing a different investment on behalf of a sanctioned Russian oligarch. Sobachevskiy has not been personally accused of wrongdoing. 

A Tomales Bay Capital spokesperson said that the oligarch “had no involvement with the investment.” Sobachevskiy did not respond to questions, including who put up the money for the SpaceX investment.

The records also shed some light on the connections between SpaceX and Qatar. Funds affiliated with Bracket Capital — an investment firm with offices in Los Angeles, London and Qatar — invested about $48 million through a series of deals from 2017 through 2020, the documents show. Bracket has money from the Qatari royal family, according to an email that Kahlon sent to SpaceX’s CFO. The ledger also lists Doha, Qatar, as the address for a mysterious entity called AM FIG Cayman Limited, which invested around $10 million in 2020.  

The documents do not specify whether the Bracket investments were made on behalf of the royal family or some other client. In 2021, as Kahlon was soliciting backers for yet another SpaceX deal, he texted a Bracket employee: “At the end we can just send Yalda to talk to big guy. We need a bail out lol.” (Yalda Aoukar is Bracket’s co-founder. It’s 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.

The investments covered in the ledger were tiny percentages of SpaceX but would have generated windfalls. 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 money from Chinese investors. According to testimony from the Delaware case, the company allowed Chinese investors to buy stakes in SpaceX so long as the money was routed through the Cayman Islands or other offshore secrecy hubs.

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