Deorbited: Virgin Orbit files for bankruptcy in the US as funding dries up

The company laid of 85 percent of its staff last week.
Ameya Paleja
Richard Branson and Virgin Orbit headquarters
Richard Branson and Virgin Orbit headquarters

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Virgin Orbit, a spin-off from British billionaire's space venture, Virgin Galactic, has filed for Chapter 11 bankruptcy in the U.S. in a bid to finalize a value-maximizing sale. The company had been looking to secure long-term funding for some time now but attempts to do so failed. By filing for Chapter 11 bankruptcy, the company hopes to find a new buyer.

With private agencies taking up the task of satellite launches, Virgin Orbit was looking to carve a niche for itself by launching them using a modified Boeing 747 plane. The company briefly tasted success when its first commercial launch in 2021 put seven satellites in orbit after carrying them under the 747's wing.

Shortly thereafter, the company went public after raising $225 million and was valued at $3 billion at the time. However, it failed to replicate its success, and launch issues marred its progress.

Why space is hard?

2022 was supposed to be a busy year for Virgin Orbit with plans to carry out launches every week, a report said in 2021. What we saw instead was pushing back of launch deadlines which further dented investor confidence in the company.

Even when Virgin Orbit raised its $225 million to go public, the money raised was below expectations. With an estimated cash burn of $20 million a month, according to an Ars Technica report, Virgin Orbit needed repetitive successful launches to keep itself going.

Deorbited: Virgin Orbit files for bankruptcy in the US as funding dries up
Virgin Orbit's Cosmic Girl, the modified 747 used to launch satellites

Virgin Orbit's 70-foot rocket called Launcher One was tasked with deploying nine satellites earlier in January this year, a first from U.K. soil. However, a second-stage failure meant that the rocket failed to reach orbit and the nine payloads belonging to the U.S. and U.K. intelligence agencies were forever lost. Also lost, were hopes of raising some money from the U.K. government to further fund Virgin Orbit's research and development work.

According to a Reuters report, Virgin Orbit was looking to raise $200 million last month but when talks collapsed, the company had to lay off employees. Branson's Virgin Investments Limited has given the company $10.7 million to fund severances.

As per last year's filings, Virgin Orbit has a debt of $153 million and assets of $243 million and the bankruptcy filing is being looked at as the best path forward to "finalize an efficient and value-maximizing sale," CEO Dan Hart said in a statement.

The filing of the bankruptcy allows Virgin Orbit to reorganize its debt and assets and continue operations during this period. If Virgin Orbit can fix the rocket science that ails the company, this might not truly be the end of plane-assisted satellite launches.

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