As SpaceX prepares for its public offering, it's undergoing a critical test of the largest rocket ever built.

Later on Thursday, the company is set to conduct a launch of a heavily redesigned version of its Starship rocket. The new rocket will fly using dozens of new Raptor 3 engines powered by a novel fuel system in the booster. It will also carry upgraded avionics, satellites, and test ports for a future refueling system that could allow Starship to one day reach other destinations like the Moon and even Mars.

The launch comes a little under a month before investors expect SpaceX's much-anticipated initial public offering. Many analysts expect SpaceX to raise up to $75 billion, and to be valued at up to $1.5 trillion. The amount raised could make this the largest IPO ever, and make SpaceX one of the most valuable companies in the world.

But a lot of that may rest on how Starship performs.

The launch is "super important for the IPO," said Franco Granda, a senior researcher who covers SpaceX for the data firm, PitchBook. He believes that if Starship's launch goes badly, it could cause investors' excitement for the IPO "to diminish quite dramatically."

"Even though tests are inherently tests, and failure typically doesn't dictate what happens later on, I think SpaceX will want to get this one right," he said.

Financial disclosures released on Wednesday show just how critical the test is. SpaceX is spending billions of dollars per year developing Starship. The development is eating up the profits from its launch business, which operated at a $662 million loss in the first quarter of this year.

Cheap, frequent launches key to the business model

Starship is unlike any rocket ever built. Standing at around 400 feet in height, it's made of durable, but heavy, stainless steel. To overcome its bulk, the spacecraft sits atop an enormous booster called "Super Heavy" that shoots it skyward with 33 Raptor engines. After Starship separates from the booster, it can ignite its six engines to get to space, while the booster is capable of flying back to earth and landing at its launchpad.

SpaceX CEO Elon Musk has said that the ultimate goal is to make Starship return to the pad, allowing the entire system to be reused almost instantaneously. If it works, it would radically lower the cost of launches.

That's key to SpaceX's short-term and long-term vision. The rocket is expected to carry larger, more capable satellites for the company's Starlink internet service. It's also being developed into a lunar lander for NASA and as a possible rocket to Mars. Most recently, Musk proposed that Starship could be used to launch data centers into space, where they could use solar power to run AI chips.

"Starship is a critical piece of the puzzle," Musk said during an event in March to unveil a new chip fabrication facility. To achieve SpaceX's goals, "you need massive payload to space, and Starship will enable that."

The new financial disclosure document reveals just how much of SpaceX's future relies on Starship's development. 

"Any failure or delay in the development of Starship at scale or in achieving the required launch cadence, reusability and capabilities thereafter would delay or limit our ability to execute our growth strategy," the document says. 

It also puts real numbers on how much money SpaceX is spending to develop the giant rocket. In 2025, the company spent a little over $3 billion dollars. In the first quarter of 2026, it spent another $930 million on Starship development.

Success is far from assured. The first version of Starship launched in April of 2023, but failed to separate from its booster and tumbled out of control before exploding. It took three tries before the rocket eventually reached space. The second version of the spacecraft was plagued by multiple failed attempts throughout 2025, though its final two launches went as expected.

This third version is an ambitious redesign, said Scott Manley, an engineer and YouTuber who closely tracks Starship's development. Manley said that the latest version of Starship is more refined. Heat tiles appear more carefully placed, and clunky, temporary fixes, like a "hot staging ring" that was bolted onto the booster after the first accident, have been integrated into the design.

"It looks more like a rocket and less like a bunch of grain silos welded together," he said.

Manly said he's particularly interested in how the rocket's new Raptor 3 engines perform. The engines have been heavily redesigned to increase thrust and eliminate the need for bulky shielding on the bottom of the rocket. The engines have been extensively tested, but they haven't been to space before. "We don't know how they're going to perform under flight circumstances."

Even if the newest version of Starship flies as expected, the space launch company faces a long path towards making the behemoth rocket work as a business proposition. Starship's heat shield has not yet proven durable enough to survive multiple trips through the atmosphere and the spacecraft itself has yet to attempt a landing at the pad in Brownsville, Texas.

Getting all the parts of Starship to work as planned is far more complex than what SpaceX has done with its existing rocket, the Falcon 9, said Tim Farrar, the president of TMF associates, which analyzes mobile satellite services. Starship is "a multidimensional problem that they haven't actually solved yet," he said.

"You can't justify a valuation well in excess of a trillion dollars based on what SpaceX is doing today," Farrar said. "You've got to believe that Musk will come up with something much bigger than that."