Virgin Orbit has filed for Chapter 11 bankruptcy protection a few days after officially shutting down its space launch operations. The private space company has been burning money for a while now and reported a loss of $49.2 million in its last fiscal quarter. It tried to raise money in late 2021 by going public through an SPAC merger that was expected to raise $483 million for the company. However, it ultimately got less than half of that amount in gross proceeds.
While Virgin Orbit carried on throughout 2022, its financial issues came to a head after its “Start Me Up” mission didn’t quite go as expected. It was supposed to be a historic event as the first orbital launch from UK soil, but it failed to reach orbit due to a dislodged fuel filter. The company went into operational pause and furloughed most employees after that, in mid-March, as it sought new investors. And by the end of last month, it extended its employee furlough, because it wasn’t able to close any deals.
Virgin Orbit’s late-stage discussions with Texas-based investor Matthew Brown, who was going to put $200 million into the company, reportedly broke down. It was perhaps the perfect deal for the launch provider, since that amount would’ve been enough to give the investor a controlling stake. A previous report by CNBC’s Investing in Space newsletter said Sir Richard Branson didn’t want to own the company anymore, even through the bankruptcy process, and that the Virgin Group had been rushing to find new sources of funding and buyers before the news broke.
On March 30th, the company officially shuttered its space launch operations due to lack of funding. It flew a total of six flights from 2020, though only four of which were able to put satellites in orbit. According to Financial Times, Virgin Orbit said it expected to report $33.1 million in revenue and a net loss of around $191 million for the 2022 fiscal year. The company’s search for a buyer will now proceed while protected by Chapter 11, though the process could culminate in the business being wound down if it doesn’t find a new owner.