Richard Branson’s Space Company Virgin Orbit Files for Bankruptcy

For Mr. Branson, the failure marks a significant blow after his Virgin Group invested more than a billion dollars into a company that once appeared to have bright prospects in the rapidly growing market for commercial-satellite launches.

“While we have taken great efforts to address our financial position and secure additional financing, we ultimately must do what is best for the business,”

Virgin Orbit’s

VORB -3.00%

chief executive,

Dan Hart,

said in a statement.

Virgin Orbit, which filed for chapter 11 with the U.S. Bankruptcy Court in the District of Delaware, said it received a $31.6 million commitment from Virgin Investments Ltd. in the form of so-called debtor-in-possession financing. The company said that financing would help it fund its operations while it finds a buyer.

Last week, the six-year-old company said it was slashing its head count by about 675 employees—about 85% of its total workforce—in an effort to reduce costs.

Virgin Orbit was launched amid a surge in demand for sending satellites into space and, later, the loss of access to Russian alternatives after Moscow’s invasion of Ukraine. The company, whose satellites are fired from under the wing of a

Boeing Co.

747 jumbo jet, pitched itself as a shake-up in the industry, able to launch at short notice and from any runway that can handle these planes. 

The method ran counter to the likes of

Elon Musk’s

Space Exploration Technologies Corp., referred to informally as SpaceX, which uses vertical launchers to send satellites into space. 

In December 2021, Virgin Orbit went public by combining with a U.S.-listed blank-check company, a deal that valued the business at more than $3 billion. It also won interest from Boeing Co. and Mubadala Investment Co., a United Arab Emirates sovereign-wealth fund, which had earlier invested around $1 billion in the business.

The company’s fall from grace came rapidly with January’s failed launch from England. It was meant to be the springboard for attracting new financing, according to a person familiar with the company’s strategy. The failure came at a time when investors’ appetite to invest in new technology startups, especially those as capital-intensive as a satellite launcher, has waned. 

Mr., Branson’s closely held Virgin Group—a business empire that includes airlines and cruise ships—took a hit during the Covid-19 pandemic shutdowns and travel restrictions. 

Amid these travails, Mr. Branson’s space ventures were a bright spot. He separately helped launch the commercial space tourism venture Virgin Galactic Holdings Inc.

With the easing of pandemic restrictions, Mr. Branson’s tourism empire has since seen a reversal in its fortunes.

Virgin Voyages, a cruise line, is taking delivery of a new ship in May. Virgin Hotels is opening new hotels in New York, Glasgow and Edinburgh, while Virgin Atlantic Airways Ltd. has brought itself back from the brink of bankruptcy in a wide-ranging restructuring.

Virgin Galactic, which beat out

Jeff Bezos

’ Blue Origins in 2021 to kick-start the commercial space tourism industry, is set to send members of the Italian Air Force into near space later this year as a precursor to the launch of trips for members of the public who can afford the hefty price tag.

Virgin Orbit is the latest company that took the SPAC route to the public markets to file for bankruptcy. The grocery courier Boxed Inc. said on Sunday it filed for bankruptcy. It completed its merger with a special-purpose acquisition company in the same month and year as Virgin Orbit.

Write to Dave Sebastian at [email protected] and Benjamin Katz at [email protected]

For Mr. Branson, the failure marks a significant blow after his Virgin Group invested more than a billion dollars into a company that once appeared to have bright prospects in the rapidly growing market for commercial-satellite launches.

“While we have taken great efforts to address our financial position and secure additional financing, we ultimately must do what is best for the business,”

Virgin Orbit’s

VORB -3.00%

chief executive,

Dan Hart,

said in a statement.

Virgin Orbit, which filed for chapter 11 with the U.S. Bankruptcy Court in the District of Delaware, said it received a $31.6 million commitment from Virgin Investments Ltd. in the form of so-called debtor-in-possession financing. The company said that financing would help it fund its operations while it finds a buyer.

Last week, the six-year-old company said it was slashing its head count by about 675 employees—about 85% of its total workforce—in an effort to reduce costs.

Virgin Orbit was launched amid a surge in demand for sending satellites into space and, later, the loss of access to Russian alternatives after Moscow’s invasion of Ukraine. The company, whose satellites are fired from under the wing of a

Boeing Co.

747 jumbo jet, pitched itself as a shake-up in the industry, able to launch at short notice and from any runway that can handle these planes. 

The method ran counter to the likes of

Elon Musk’s

Space Exploration Technologies Corp., referred to informally as SpaceX, which uses vertical launchers to send satellites into space. 

In December 2021, Virgin Orbit went public by combining with a U.S.-listed blank-check company, a deal that valued the business at more than $3 billion. It also won interest from Boeing Co. and Mubadala Investment Co., a United Arab Emirates sovereign-wealth fund, which had earlier invested around $1 billion in the business.

The company’s fall from grace came rapidly with January’s failed launch from England. It was meant to be the springboard for attracting new financing, according to a person familiar with the company’s strategy. The failure came at a time when investors’ appetite to invest in new technology startups, especially those as capital-intensive as a satellite launcher, has waned. 

Mr., Branson’s closely held Virgin Group—a business empire that includes airlines and cruise ships—took a hit during the Covid-19 pandemic shutdowns and travel restrictions. 

Amid these travails, Mr. Branson’s space ventures were a bright spot. He separately helped launch the commercial space tourism venture Virgin Galactic Holdings Inc.

With the easing of pandemic restrictions, Mr. Branson’s tourism empire has since seen a reversal in its fortunes.

Virgin Voyages, a cruise line, is taking delivery of a new ship in May. Virgin Hotels is opening new hotels in New York, Glasgow and Edinburgh, while Virgin Atlantic Airways Ltd. has brought itself back from the brink of bankruptcy in a wide-ranging restructuring.

Virgin Galactic, which beat out

Jeff Bezos

’ Blue Origins in 2021 to kick-start the commercial space tourism industry, is set to send members of the Italian Air Force into near space later this year as a precursor to the launch of trips for members of the public who can afford the hefty price tag.

Virgin Orbit is the latest company that took the SPAC route to the public markets to file for bankruptcy. The grocery courier Boxed Inc. said on Sunday it filed for bankruptcy. It completed its merger with a special-purpose acquisition company in the same month and year as Virgin Orbit.

Write to Dave Sebastian at [email protected] and Benjamin Katz at [email protected]