Billionaire Branson sits out Virgin Orbit’s costly flameout

BLOOMBERG

Richard Branson was long a force to be reckoned with in the booming private space business. The British serial entrepreneur beat fellow billionaire Jeff Bezos to the first cosmic tourist trip with his Virgin Galactic venture. Branson’s second space foray, Virgin Orbit, strapped rockets under the wing of a jumbo jet to launch satellites on their flight path, complete with mission monikers like “Start Me Up” that reflect his distinctive blend of business and bravado.
But following a serious misstep in January, when Virgin Orbit’s quest for the first-ever launch from the UK failed because of a technical malfunction, the once high-flying enterprise is on the brink.
With cash running out and the next launch attempt unclear, management placed workers at the Long Beach, California, headquarters on furlough. As the company seeks rescue financing or bankruptcy, the financial risk for employees, suppliers and other investors is sizable. And yet one major stakeholder has distanced himself from the struggling venture: Branson himself.
The billionaire, 72, whose Virgin Group has pumped more than $1 billion into Virgin Orbit — including $60 million in the past six months — hasn’t recently put in the money now needed to prop up the venture. That’s forcing the company to speak to external investors such as little-known Texas-based venture capital funder Matthew Brown, who has been touting himself as a possible savior of a business that was worth billions just a year ago.
Branson’s reserve coincides with growing caution among investors in an industry in which the technical risks are as high as the costs to surmount them. It marks a reversal for the businessman, a pioneer of the Covid-era SPAC boom for space companies that used the special-purpose-acquisition-company approach to provide startups with a rapid route to the public markets — potentially before they were ready for the scrutiny that comes with it.
After Virgin Galactic in 2019, Virgin Orbit followed with its market debut in 2021 after completing two successful flights.