Virgin Orbit

Virgin Orbit was a satellite launch company founded in 2017 by Richard Branson as a spinoff of Virgin Galactic.³¹²¹⁴ The company filed for Chapter 11 bankruptcy in April 2023 after failing to secure funding following a January 2023 launch failure.⁴⁵⁶ Virgin Orbit permanently ceased operations in May 2023 after selling its assets to Rocket Lab, Stratolaunch, and Launcher.²¹²

Timeline

Money raised

Virgin Orbit was valued at $3.7 billion when it went public via SPAC merger in December 2021.³¹⁰¹² The SPAC merger was expected to provide up to $483 million in new capital, including $383 million from NextGen and $100 million in PIPE investments.⁹ Virgin Orbit raised only $228 million from the SPAC merger, less than the expected $483 million.⁴ In 2022, Virgin Orbit signed an equity agreement with Yorkville Advisors reportedly worth $250 million, but the deal allowed Yorkville to sell shares to public investors rather than providing direct cash.³ Virgin Orbit lost $44 million in the third quarter of 2022, up from $38 million the year prior, with revenue of approximately $31 million.³ Richard Branson contributed at least $60 million of his own cash recently and was thought to have spent at least $1 billion in total on Virgin Orbit.³ Virgin Orbit secured $31.6 million in debtor-in-possession financing from Virgin Investments for the Chapter 11 process.⁴ The company's assets were sold for just over $36 million, which was barely 1% of its $3.7 billion valuation in December 2021.¹¹¹²

Investors named in the sources: Richard Branson³¹⁰¹⁴, Virgin Group¹⁰, Mubadala¹⁰, Boeing⁹¹⁰, AE Industrial Partners⁹, Yorkville Advisors³, Virgin Investments⁴.

What happened

Virgin Orbit was founded in 2017 as a spinoff of Virgin Galactic to provide small satellite launch services.³¹²¹⁴ The company used a modified Boeing 747 aircraft named Cosmic Girl to air-launch its LauncherOne rocket.³⁴¹²¹⁵ In January 2021, Virgin Orbit achieved its first successful launch, sending 10 satellites to orbit.¹⁵¹⁸ The company completed four successful launches, deploying 33 satellites for customers including the U.S. Department of Defense and NASA.¹⁸ The SPAC merger raised only $228 million, less than the expected $483 million, leaving the company with a cash shortfall.⁴

Virgin Orbit faced financial difficulties as it was not profitable, losing $44 million in the third quarter of 2022.³ The company's air-launch method had hidden costs, including maintaining and fueling two aircraft, and it could not launch frequently enough to generate sufficient revenue.³ Virgin Orbit pivoted to focus on government and national security launches, but government contracts were slow to materialize.¹⁸ The company planned to diversify into satellite services but lacked the cash to do so.¹⁸ In January 2023, Virgin Orbit's launch from Spaceport Cornwall in the UK failed due to a second stage anomaly, resulting in the loss of nine satellites.⁴¹²¹⁷

The launch failure was a catalyst that made investors more reluctant to provide funding.⁴ In March 2023, Virgin Orbit paused operations and furloughed most of its 750 employees while seeking funding.³¹⁰ The company resumed limited operations with a small team to prepare for a potential next launch, but the furlough continued for most employees.¹⁰ Virgin Orbit was in talks for a $200 million investment from venture capital investor Matthew Brown, but the deal fell through.¹⁰¹³ At the end of March 2023, Virgin Orbit laid off approximately 85% of its workforce after failing to secure funding.⁴¹²

On April 4, 2023, Virgin Orbit filed for Chapter 11 bankruptcy protection.⁴⁵⁶ The company secured $31.6 million in debtor-in-possession financing from Virgin Investments to fund the bankruptcy process.⁴ Virgin Orbit's assets were auctioned off, with Rocket Lab, Stratolaunch, and Launcher acquiring key assets for just over $36 million.²¹¹¹² On May 24, 2023, Virgin Orbit announced it would permanently cease operations.²¹² Most of Virgin Orbit's nearly 700 employees were laid off, with affected employees based in Long Beach or Mojave.⁴

The company's COO Tony Gingiss blamed CEO Dan Hart and the board for the bankruptcy sale, saying he was unable to convince them to take a different path.¹³ Virgin Orbit's collapse affected its sister company Virgin Galactic, whose stock also declined.³⁴ The UK Space Agency released a lessons learned report on the failed launch, noting that Virgin Orbit's over-optimistic delivery plans complicated international engagement.¹⁷ Former CEO Dan Hart said the company did not raise enough money, as its closest competitor had raised over three times as much.¹⁸

Legal outcomes

• filedVirgin Orbit filed for Chapter 11 bankruptcy protection on April 4, 2023.⁴⁵⁶

Where the founders are now

Richard Branson, the founder of Virgin Orbit, is the largest shareholder with a 75% ownership stake.¹⁰ Branson's Virgin Investments provided $31.6 million in debtor-in-possession financing for the bankruptcy process.⁴

Lessons, as others put them

"Number one is always fly. No space program succeeds sitting on the ground, and we succeeded in carefully managing risk and moving forward. Obviously, cash is king. And you need to have contingency because hard issues will come up every day. And hit the investment market when it's hot. I mean, urgently."Dan Hart, former CEO of Virgin Orbit¹⁸

Sources

2. Virgin Orbit shuts down after selling key assets to 3 aerospace companies, Space, 2023-05-24
3. Virgin Orbit’s Swift Descent, dot.LA, 2023-03-20
4. How a Promising Space Startup Landed in Bankruptcy Protection, GovTech, 2023-04-05
5. Branson's Virgin Orbit files for bankruptcy after launch ..., reuters.com, Apr 4, 202
6. Virgin Orbit Bankruptcy Echoes Branson, Minutehack, Apr 4, 202
9. Long Beach-Based Virgin Orbit Going Public via SPAC, Valued At $3.2 Billion, dot.LA, 2021-08-23
10. From $3.7bn to $150m: what led to Virgin Orbit’s meteoric fall?, cmcmarkets.com, Mar 27, 20
11. Branson and creditors of Virgin Orbit raise $36mn from fire ..., ft.com, May 23, 20
12. Virgin Orbit ceases operations months after failure of UK space mission, the Guardian, 2023-05-24
13. Top exec at Richard Branson’s Virgin Orbit blames CEO and board for bankruptcy sale | Fortune, Fortune, Apr 5, 202
14. Introducing Virgin Orbit, our new space company | Virgin, Virgin.com, Mar 1, 201
15. Virgin Orbit – Cosmic Log, Cosmic Log
17. Report outlines lessons learned from first U.K. launch, SpaceNews, 2023-12-17
18. Former Virgin Orbit CEO Dan Hart on the Milestones, Hopes, and Heartbreaks of Virgin Orbit’s Journey, Via Satellite, 2024-01-22

How this case file was put together

Every statement on this page carries a numbered note, and every note points to a court record, a regulatory filing or a named publication in the list of sources. Each statement was checked against the text of the sources it cites before it was published: a figure, a date or a name the cited source does not contain was cut rather than kept. Allegations are shown as allegations, with their status at the time of the source (filed, charged, convicted, pleaded, settled, dismissed or pending). Quoted lessons are the words of the person or publication named with them, copied from the cited source; nothing here is our own opinion of why the company failed.

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