British billionaire Richard Branson's satellite launch company Virgin Orbit has filed for bankruptcy after it failed to secure long-term funding required to recover from a rocket launch failure in January.
Virgin Orbit was spun-off from Richard Branson’s space tourism company, Virgin Galactic, in 2017, after a team within the latter's sister company saw the potential in using an aircraft as a platform to launch satellites.
Virgin Orbit had hoped to launch its debut mission as early as 2018, but that goal kept moving. Eventually, it launched its first mission in May 2020, which failed shortly after the rocket was released from the jet.
Virgin Orbit was already in a deep financial hole due to steady losses since its inception, and had a total deficit of $821 million at the end of 2021. The company aimed to launch 7 missions in 2022 but managed to close out 2022 with just two completed launches.
Virgin Orbit’s trouble deepened after the company’s sixth mission in January failed as its LauncherOne rocket, the first mission from the UK, failed to reach the orbit and sent US and UK intelligence satellites plunging into the ocean.
As a result of the failure in January this year, the company failed to secure funding, and was forced to halt its operations on March 15 and furlough nearly all its employees to conserve cash.
Virgin Orbit stock was trading around 19 cents on Wednesday, leaving it with a market value of about $65 million. In the last one year, the stock has nearly halved investors' money as it has tanked 97% in the last 12 months.
Richard Branson and Virgin Group have invested more than $1 billion in the business to launch satellites through Virgin Orbit, which along with its sister company Virgin Galactic has been rapidly burning cash. In the last one year, Virgin Galactic shares have tanked 63%.
Richard Branson is one of the few billionaires who have expanded their business empires into launching satellites and attempts to pioneer commercial space travel. The others include Amazon founder Jeff Bezos and Tesla, Twitter boss Elon Musk.
On July 11, 2021, Richard Branson hurtled into space aboard his own winged rocket ship, beating out fellow billionaire Jeff Bezos, who launched into suborbital space on July 20, 2021. Branson reached an altitude high enough to experience three to four minutes of weightlessness and see the curvature of the Earth.