Virgin Orbit, the satellite launch company backed by British billionaire Richard Branson, is reportedly on the brink of bankruptcy. The company’s valuation has taken a massive hit, falling from nearly $4 billion in 2021 to less than $100 million today.
According to CNBC, the company has struggled to generate enough revenue due to its inability to reach the rate of launches necessary to sustain its business model. Despite touting a flexible approach to launching small satellites, the company has faced numerous setbacks and challenges in its efforts to become a major player in the satellite launch industry.
Virgin Orbit’s troubles can be traced back to its failed attempt to launch a rocket from a modified Boeing 747 aircraft in May 2020. The launch, which was intended to demonstrate the company’s unique approach to satellite launches, ended in failure when the rocket’s engine shut down shortly after ignition. The company was able to successfully launch a rocket from the ground in January 2021, but has struggled to maintain a consistent launch schedule since then.
According to sources cited by CNBC, Virgin Orbit’s inability to generate revenue has been exacerbated by the COVID-19 pandemic, which has caused delays and disruptions throughout the satellite launch industry. The company’s reliance on government contracts has also been a hindrance, as these contracts often come with strict requirements and lengthy approval processes.
Despite these challenges, Virgin Orbit has continued to attract investment from high-profile backers such as Branson and the Abu Dhabi sovereign wealth fund. However, these investments have not been enough to keep the company afloat.
Virgin Orbit has declined to comment on the reports of its financial troubles. However, sources close to the company have suggested that bankruptcy may be imminent if the company is unable to secure additional funding.
The news of Virgin Orbit’s potential bankruptcy is a blow to Branson, who has long touted the company as a key component of his broader vision for space tourism and exploration. It also highlights the challenges faced by companies attempting to disrupt the highly regulated and capital-intensive satellite launch industry.
The struggles of Virgin Orbit serve as a cautionary tale for other companies seeking to break into the satellite launch market. Despite the promise of innovation and flexibility, the realities of the industry can be harsh and unforgiving, requiring significant resources and expertise to succeed.
The website of Virgin Orbit is found here:
https://virginorbit.com
Read more about the story here:
https://www.cnbc.com/2023/03/31/virgin-orbit-what-went-wrong.html
