SpaceX's IPO sparks a surge in U.S. aerospace investments; small-space ETFs receive record-breaking capital inflows.

With SpaceX—the most talked-about private space company globally—seemingly targeting an early June listing, anxious investors are pouring into a large number of small-cap space-listed companies.

According to statistical data, a “mini fund” in the U.S. market—Procure Space ETF (UFO), with total assets just over $400 million—pulled in nearly $175 million in the first quarter this year, the largest single-quarter inflow since the fund was launched in 2019.

Phillip Blanchato, chief market strategist at Osaic Holdings, the 15th-largest institutional investor in the fund, said that amid market frenzy over the chance to participate in a trillion-dollar-class IPO, the excitement is indeed having an impact. The investment advisory firm is seeing very strong investor demand for exposure to investments related to SpaceX.

Blanchato added: “Even five years ago, being viewed as crazy for investing in a fund like UFO. But with expectations of global government incentive measures driving the whole sector higher, this situation has already changed.”

As background, EchoStar (EchoStar Communications), the fund’s third-largest holding and a satellite and internet services provider, holds a small amount of SpaceX stock.

Andrew Chanin, CEO of ProcureAM, which manages the fund, told the media that in recent years, investor interest in the concept of space tourism was attracted by Blue Origin, founded by Amazon founder Jeff Bezos, and Virgin Galactic, founded by Richard Branson. Today, the market’s focus has shifted to emerging areas such as satellites, communications technology, space data centers, and lunar infrastructure.

In addition, this space also overlaps with the defense and military-industrial sector, which has gradually become a market hotspot in recent years. Beyond conventional weaponry and artillery, satellite internet and drones have already become synonymous with new forms of defense capability.

As another sign of the current surge in commercial space investment, a basket of space-themed stocks compiled by Bank of America is up more than 20% this year, while the S&P 500 index and the Nasdaq are still in net decline.

In this basket of stocks, the biggest gainer is Satellogic, a satellite imagery and mapping company. This company, supported by the investment bank Cantor Fitzgerald, which is run by a private equity firm under former U.S. Treasury Secretary Steven Mnuchin and the Lutnik family, has risen more than 250% since the beginning of this year.

（Satellogic daily chart, source: TradingView）

As the root of this round of commercial space investment enthusiasm, the latest news says that on Monday evening, SpaceX provided several underwriter banks with an overview of certain IPO details, including reserving a large number of new shares for retail investors, and after launching roadshows in the week of June 8, holding an event to host 1,500 retail investors. In addition, the company plans to publicly release its IPO prospectus in late May.

According to reports, SpaceX Chief Financial Officer Brett Johnsen told bankers that retail investors will be a key part of this IPO, and its (allocation) ratio will be higher than in any IPO in history.

Based on rumors that SpaceX could raise $75 billion at a $1.75 trillion valuation, the company’s performance after listing is completely unpredictable.

PitchBook analyst Kyle Stanford wrote in a report that if SpaceX’s financing size reaches $50 billion to $75 billion, and OpenAI and Anthropic together raise another $50 billion, then this scale would be roughly equivalent to the total amount of funds raised via IPO over the past decade by U.S. venture capital-backed companies.

（Source: Caixin Global）