Virgin Orbit Holdings, a satellite launch company owned by billionaire entrepreneur Richard Branson, has filed for Chapter 11 bankruptcy after failing to secure the necessary long-term funding to recover from a rocket launch failure earlier this year. The company, based in Long Beach, California, lodged the filing in the U.S. Bankruptcy Court for the District of Delaware and is seeking a sale of its assets.
The bankruptcy filing comes after Virgin Orbit announced the layoff of roughly 85% of its 750 employees last week. The company cited the economic impact of the COVID-19 pandemic as well as the rocket launch failure as reasons for its financial troubles.
The January 2021 launch of the LauncherOne rocket, which was carrying 10 small satellites for NASA, ended in failure when the rocket’s engine shut down prematurely. The rocket fell into the Pacific Ocean without reaching orbit, resulting in the loss of the satellites and a significant setback for Virgin Orbit’s plans to become a major player in the satellite launch industry.
Despite the setback, Virgin Orbit continued to pursue new business opportunities and secured a $35 million investment from Boeing HorizonX Ventures in June 2021. However, the company was unable to secure the additional funding needed to recover from the launch failure and continue operations.
In a statement, Virgin Orbit CEO Dan Hart expressed his disappointment at the bankruptcy filing but emphasized the company’s commitment to finding a buyer for its assets and continuing to support its customers.
“Our team has worked tirelessly to develop a world-class launch system that would increase access to space for small satellites, and while we are proud of our achievements, we have not been able to secure the funding necessary to continue our mission,” Hart said. “We remain committed to our customers and partners, and are confident that a buyer for our assets will emerge who shares our vision and can help take our technology to the next level.”
The bankruptcy filing is a significant setback for Richard Branson’s Virgin Group, which has invested heavily in space tourism and satellite launch ventures in recent years. The group’s Virgin Galactic division is currently preparing to launch its first fully crewed suborbital spaceflight later this year, with Branson himself slated to be on board.
The bankruptcy filing also highlights the challenges faced by the commercial space industry, which has seen a surge in investment and activity in recent years but remains highly competitive and capital-intensive. Despite the setbacks, many industry analysts remain optimistic about the long-term prospects for companies like Virgin Orbit, which are at the forefront of developing new technologies and business models for space exploration and commerce.
As Virgin Orbit seeks a buyer for its assets, it remains to be seen what the future holds for the company and its employees. However, the bankruptcy filing underscores the risks and challenges of the commercial space industry, and the importance of securing the necessary funding and support to succeed in this highly competitive and rapidly evolving field.