Richard Branson’s Virgin Orbit filed for bankruptcy on Tuesday following a failed launch. One of the three main competitors in the new space race has dropped out.
The renewed space race has lost one of its competitors on Tuesday as Virgin Orbit files for bankruptcy. The company founded by billionaire entrepreneur Richard Branson was indebted by $153.5 million, with assets totaling $243 million.
“We believe that the Chapter 11 process represents the best path forward to identify and finalize an efficient and value-maximizing sale,” said Virgin Orbit CEO Dan Hart.
Virgin Orbit was one of three main competitors in the renewed space race. The other two, SpaceX and Blue Horizon, were also founded by billionaire tech entrepreneurs: Elon Musk and Jeff Bezos respectively.
Richard Branson’s dream was to start an era of space tourism for the super-wealthy. So far, however, Virgin Orbit was only capable of launching small rockets from below a modified Boeing 747.
Virgin Orbit’s problem, however, started already when the company went public in 2021. They raised $255 million less than expected as the competition from SpaceX creeped up.
SpaceX’s large Falcon 9 rockets captured the attention of the public with their ability of landing the initial stages back at the launch site. This way, the expensive fuel tanks would be preserved and not lost after the launch like it was the case.
A failed launch
In January 2023, Virgin Orbit was supposed to conduct its sixth launch. The rockets, however, failed to reach orbit and crashed into the ocean with their payload.
Already lacking in liquidity, after the failed launch Virgin Orbit could not raise any more investments. Last month, the company was in talks to receive a $200 million funding from a Texas-based group. These talks, however, were unsuccessfully concluded last week, leaving Virgin Orbit no other option but to file for bankruptcy.
Virgin Group, and therefore Richard Branson, owned a majority stake in the company, amounting to roughly 75% of the shares. An Abu Dhabi-based fund owned the second largest share at 17.9%.
The company’s evaluation was $65 million, with its biggest creditors being the British group Arquit Ltd and the United States Space Force.
Arquit was a satellite launching company that provided encrypting services to the United States, Canada, Australia, the UK and New Zealand. Later in 2022, Arquit announced they’d stop developing satellites having found a ground-based encrypting system.
With the fall of Virgin Orbit, Elon Musk and Jeff Bezos have only each other to fight over. The new space race just saw its first competitor dropping out. Who is going to be the next?
