Branson and creditors of Virgin Orbit raise $36mn from fire sale

Sir Richard Branson’s dream of launching rockets into space under the wing of a converted 747 jet ended on Monday with rivals snapping up assets from Virgin Orbit for just over $36 million.

The breakout price is just 10% of the $3.7 billion valuation attributed to Virgin Orbit in December 2021 when the rocket launch company merged with a special purpose acquisition company, or Spac, to make its Nasdaq debut. It’s also a fraction of the billion dollars that Branson’s Virgin Investments says it has pumped into the company.

Rocket Lab, the fast-growing launch startup with offices across from Virgin Orbit’s headquarters in Long Beach, Calif., has purchased the company’s 140,000-square-foot rocket factory and equipment for $16.1 million.

Virgin Orbit’s converted jet, called Cosmic Girl, was sold to builder of the world’s largest plane, Stratolaunch, for $17 million, well below the investment made by Virgin Orbit to buy and convert the aircraft. Stratolaunch is developing technology to test hypersonic missiles from its Roc aircraft. Prior to its collapse, Virgin Orbit was exploring similar opportunities for Cosmic Girl.

A third space company, Launcher Inc, recently acquired by Vast, a private space station company, purchased VO’s launch site and lease in the Mojave Desert for $2.7 million.

Including the sale of laptops and office equipment, the auction raised some $36.5 million for creditors. Branson’s Virgin Investment controlled about 75% of the company.

While planes and production facilities have found buyers, successful sales have not been made for the intellectual property behind Virgin Orbit’s unique horizontal launch system or the half-dozen LauncherOne rockets sitting on the ground of the factory, said a person with knowledge of the auction. However, it is not known if the rockets are usable on another launch platform, or the IP without the aircraft.

Virgin Orbit released a statement Tuesday evening confirming the sale and thanking its investors and stakeholders. The group said it had been “at the forefront of an emerging commercial launch industry” and had made “lasting contributions to the advancement of satellite launch in the US and UK” .

“Virgin Orbit’s legacy in the space industry will be forever remembered,” he said.

The company laid off most of its workforce and filed for Chapter 11 protection from creditors in April, with $700,000 remaining in the bank.

Months of crisis talks with potential investors had failed to secure new funding for the company, which had burned through nearly $50 million a quarter in its race to grab market share from rapidly growing launch.

The auction ends Branson’s five-year effort to exploit the sector. Orbit was spun off from entrepreneur Virgin Galactic’s space tourism business in 2017 and brought in other investors including Boeing and Emirati sovereign wealth fund Mubadala. Bankruptcy filings revealed the group first sought a sale or new investment as early as early 2022, weeks after it went public.

Virgin Orbit had hoped to differentiate itself by offering highly flexible, dedicated launch services from anywhere in the world with a suitable runway. His system carried the LauncherOne rocket to 35,000 feet above Earth, from where the rocket was launched into space with its payload of satellites.

Potential customers included government and military customers, as well as commercial customers. The company reported a backlog of contracts valued at $143 million last year. However, the filings make it clear that Virgin couldn’t match the prices of its rivals, while struggling to increase the pace of launches fast enough to generate sustainable revenue. While six launches were planned last year, only two were made. Over the life of the business, accumulated losses amounted to just over £1 billion, according to filings.