SAN FRANCISCO (BLOOMBERG) - Space Exploration Technologies, the rocket maker run by billionaire Elon Musk, said that Google and Fidelity Investments have invested US$1 billion (S$1.3 billion) that will give them a combined stake of almost 10 per cent.
The money gives SpaceX cash as it explores new ways to connect people to the Internet.
Google is also racing to spread Internet access as it looks for new ways to boost its user base and sell more digital advertising.
By teaming up with SpaceX, Google would be seeking to gain an edge over rivals such as Facebook, which is working on projects to deliver Internet service to underserved regions by building drones, satellites and lasers.
WorldVu Satellites, backed by Qualcomm and Virgin Group, has begun a similar effort.
"Google needs to find additional sources of revenue," said Mr Greg Sterling, vice-president of strategy and insights for Local Search Association, whose members operate in the location- based advertising market. "If they can expand into new markets, obviously they can expand their revenue and keep investors happy."
Google and Fidelity join Founders Fund, Draper Fisher Jurvetson, Valor Equity Partners and Capricorn as SpaceX owners, the company said in a statement.
The investment gives the company a valuation of at least US$10 billion, according to a person familiar with the matter, who asked not to be identified because the matter is private.
In an interview with Bloomberg News on Jan 12, Mr Musk spoke of the need to launch smaller, more advanced satellites with greater frequency, and said SpaceX would expect to "spend at least a billion, maybe US$2 billion" on satellite activities.
Google has already unveiled Project Loon, a network of balloons designed to connect people to the Web in hard-to-reach areas of the world. The Internet company also said the acquisition last year of satellite startup Skybox Imaging Inc. may eventually help improve Internet access.
Mr Musk has gained a reputation as an innovator and successful entrepreneur, first as a co-founder of digital-payments provider PayPal and more recently as the leader of Tesla Motors.
SpaceX's goal is to advance rocket and spacecraft technology and eventually establish a city on Mars. Musk said he has no immediate plans to hold an initial public offering for SpaceX, given the long time frame for a Mars settlement and the pressure that many public companies face.
"If Google is committing money to SpaceX, they are likely to be a major investor and a real partner," said Mr Marco Caceres, director of space studies at consultant Teal Group. "Google brings the applications for the satellites to the table, and SpaceX has the technical know-how and the launch capacity."