Fidelity reduces Relativity Space rating by up to 21%

  • Relativity Space, which builds 3D printed rockets, was last valued at $ 4.2 billion last year.
  • Fidelity’s huge mutual fund, Contrafund, recently reduced its largest stake in the company by 21%.
  • Fidelity did not devalue SpaceX, Relativity’s much larger competitor.

Mutual fund giant Fidelity has reduced the value of some of its stakes in Relativity Space, an aerospace startup that produces 3D printed rockets. Rival SpaceX was last valued at $ 4.2 billion in a funding round last year.

Fidelity Contrafund’s mutual fund, a $ 110 billion fund that invests in a wide range of private and public companies, reduced its holdings in Relativity’s Series D shares by roughly 21%, from 22.83 dollars per share at the end of December to $ 17.96 per share at the end of March, according to recent archives. The fund decreased the value of the smallest tranche of Series E shares it purchased last year by a more modest 7%.

Neither Fidelity nor Relativity responded to requests for comment, so the reasons for the decline or why the shares are valued differently are unclear, but it’s possible that Fidelity sold a portion of its shares. It is rare for wealth managers like Fidelity not to value the shares of a single company equally even if they come from different fundraising sets.

Relativity was founded in 2015 by Tim Ellis and Jordan Noone, two young aerospace engineers who worked at Blue Origin and SpaceX respectively. It has since raised $ 1.3 billion in funding from corporations and private equity firms including BlackRock, Coatue, General Catalyst, ICONIQ Capital and Tiger Global. In 2021, the startup raised $ 650 million in funding led by Fidelity.

Late-stage companies like Instacart and Stripe have seen their valuations drop this year as publicly traded tech stocks plummeted. Space companies like Virgin Galactic have also been mistreated, with that company’s shares down more than 40% this year after going public via


SPACE

in 2019.

Assessing the value of private companies is more difficult as most shareholders do not publicly disclose changes in valuations. Loyalty is a notable exception, which is why it provides a rare window into how late-stage startups are valued.

It’s worthless Fidelity hasn’t devalued the value of its holdings in Space X, backed by Elon Musk, Relativity’s much bigger competitor.

Ellis, who is CEO, said the company is still on track to complete its inaugural launch earlier this year, launching Relativity’s 3D printed Terran 1 rocket into space. He also told Bloomberg earlier this year that he is not interested in a SPAC.

“Some others tried SPACs when they were hot, but we were able to get private rounds from high-quality investors,” Ellis said. “We are focused on staying private for as long as possible and the availability of capital is high.”

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