Elon Musk’s rocket company, SpaceX, intends to raise $500 million at a projected $30.5 billion valuation for investors to help build its worldwide satellite broadband network, to be called “Starlink,” according to source familiar with the plan.

(The $30.5 billion represents post-money valuation, or the value of a company after an investment has been made and is equal to pre-money valuation and the amount of new equity).

In November, SpaceX received approval from the US Federal Communications Commission (FCC) to launch 12,000 satellites into orbit by the mid-2020s to form the expansive Starlink broadband network, designed to provide worldwide high speed internet. SpaceX is planning on launching the constellation in 2019, and it will be up and running when at least 800 satellites are deployed.

The innovation behind SpaceX's approach comes from its satellites' extremely low altitude: whereas present internet satellites orbit at roughly 900 miles above Earth, Starlink will be much closer, which the company says will greatly enhance signal strength and connection speed to levels comparable with cable and fiber systems. The first batch of satellites will orbit at around 700 miles up, but the second, larger batch will be very close to the Earth: only 200 miles above our heads, Sputnik previously reported.

"From providing high-speed broadband services in remote areas to offering global connectivity to the Internet of Things through 'routers in space' for data backhaul, I'm excited to see what services these proposed constellations have to offer," FCC Chairman Ajit Pai said in November. "Our approach to these applications reflects this commission's fundamental approach: encourage the private sector to invest and innovate and allow market forces to deliver value to American consumers."

According to someone familiar with the matter who exclusively spoke to the Wall Street Journal, SpaceX is raising capital from existing shareholders and new investor Baillie Gifford & Co., a Scottish investment management firm. According to S&P Global Market Intelligence, Baillie Gifford & Co. is also a main investor in Musk's Tesla Inc., which specializes in electric car manufacturing.

SpaceX and the investors have come to an agreement on the financing terms, according to the source. When the deal goes through, SpaceX will have raised a total of $2.5 billion of equity funding, which are mutual funds that invest principally in stocks, according to Dow Jones VentureSource.

If the Starlink network is successful, Morgan Stanley, an American multinational investment bank and financial services company, predicts that SpaceX's valuation will increase to $50 billion. SpaceX was valued at around $28 billion by investors in an April funding round.

SpaceX and Baillie Gifford & Co. did not immediately respond to Sputnik's request for comment.