In a week that saw the FTSE 100 lag behind its US counterparts, one British-born billionaire has reminded the City what it is missing. Tom Mueller, co-founder of SpaceX and a native of the UK, gave a rare interview reflecting on his roots as the company’s valuation soared past $180 billion. For those keeping score at home, that is roughly the size of the entire UK aerospace sector. The irony is not lost on this corner of the newsroom. Here is a man who left these shores decades ago, built a rocket company that now launches more payloads than the entire European Union combined, and is now watching his creation trade on private markets at multiples that would make a FTSE 100 CEO weep.
Mueller’s comments came on the same day that SpaceX reportedly raised fresh capital at a valuation that values the firm north of $180 billion, a figure that exceeds the GDP of several nations. The company’s latest funding round was oversubscribed, with institutional investors tripping over themselves to get a piece of the action. This is a stark contrast to the London Stock Exchange, where IPOs have dried up and a number of tech firms have opted to list in New York. The message is clear: if you want to raise capital for a high-growth venture, you go to the States.
The numbers tell the story. Since 2019, SpaceX has raised over $10 billion, and its valuation has nearly tripled. Meanwhile, the UK’s flagship aerospace company, Rolls-Royce, trades at a price-to-earnings ratio of just 14, a fraction of what private investors are paying for a piece of SpaceX. This is not a criticism of Rolls-Royce, which is a fine company, but it speaks to the market’s appetite for the kind of speculative, high-octane growth that SpaceX represents.
Let us talk about the broader implications. The UK’s tax regime and regulatory environment have been widely criticised for driving capital flight. The number of UK-domiciled companies listing in New York has increased by 30% over the past five years. This is a haemorrhage of capital and talent that should alarm the Treasury. When a British-born founder like Mueller reflects on his roots, it is a reminder of what could have been. Imagine if the UK had the regulatory framework to keep firms like SpaceX at home. Instead, we get the dregs.
Market efficiency fans will argue that capital flows to where it is treated best, and they are right. But the question for policymakers is whether they want to compete or watch from the sidelines. The UK’s fiscal headroom is limited, but there are structural reforms that could make a difference: scrapping stamp duty on share trading, easing listing rules, and offering tax incentives for early-stage investment. These are not new ideas, but they require political will.
In the meantime, the City watches as SpaceX continues to disrupt the aerospace industry. Its Starlink satellite network now has over 2 million subscribers, generating a recurring revenue stream that analysts estimate could be worth $10 billion annually by 2025. This is not a company that is taking off; it has already left the atmosphere. For UK investors, the only way to get exposure is through secondary markets or piecing together fragments of private funds. The lack of a public listing in London is a massive opportunity cost for the LSE.
Mueller’s reflections are a nostalgic aside, but they underscore a painful truth. The UK’s equity markets are being outshone by a company that literally builds rockets. The government’s response has been to create a new tech visa and talk about ‘levelling up’ but the reality is that the golden goose has flown the coop. Until the Treasury wakes up to the fact that capital is a flighty bird, we will continue to see more stories like this. The bottom line is clear: if you want to back the next SpaceX, you had better look across the Atlantic.
For now, the market is voting with its feet. And the vote is not in favour of the UK. The challenge for the Chancellor is whether he can reverse that sentiment before the next generation of British entrepreneurs decides that the Stars and Stripes are more attractive than the Union Jack. As Tom Mueller might say, it is time for a course correction.
