# Virgin Orbit (2017 – 2023)

- URL: https://girisimcikafasi.com/en/startup-graveyard/virgin-orbit/
- Sector: Other
- Country: United States
- Total funding: unknown
- Unicorn: yes, peak valuation $3.7 billion
- Cause of closure: Ran out of cash

## What did it do?

Virgin Orbit was a launch company that released rockets in mid-air from a modified Boeing 747 to carry small satellites to orbit. It was spun out of Richard Branson's Virgin Galactic in 2017 and based in Long Beach, California. The rocket was called LauncherOne and the aircraft Cosmic Girl. It listed on Nasdaq in December 2021 through a merger with a special purpose acquisition company.

## Why did it shut down?

Two of the company's six missions since 2020 failed, and its last, from Cornwall in January 2023, did not reach orbit. Virgin Orbit had been looking for capital since October 2022. It paused operations on 16 March 2023, and when talks failed it laid off about 675 people, 85% of its workforce. Branson, who held a 75% stake, was unwilling to put in more, and it filed for Chapter 11 in Delaware on 4 April 2023. Its market value at the previous close was about USD 65 million. In the May 2023 sale Rocket Lab bought the Long Beach site for USD 16.1 million, Stratolaunch the 747 for USD 17 million and Launcher the Mojave facility for USD 2.7 million.

## The story

Virgin Orbit was spun out of Virgin Galactic in 2017. The idea was to launch rockets not from the ground but in mid-air, from under the wing of a modified Boeing 747 called Cosmic Girl. The base was in Long Beach.

The company reached Nasdaq in December 2021 at a value of USD 3.7 billion. But launching small satellites ate capital quickly, and some estimates put development spending above USD 1 billion.

In January 2023 a mission from Cornwall in the UK failed to reach orbit. Funding talks under way since October 2022 came to nothing. Operations stopped on 16 March, and about 675 people were laid off.

The Chapter 11 filing came on 4 April 2023. No buyer appeared for the whole company. At an auction in May 2023 Rocket Lab, Stratolaunch and Launcher divided the assets. The total was about USD 36 million, and the company closed for good.

## Lessons

- In a capital-heavy business, keep money for a single failure: when the January 2023 mission failed there was not enough cash for a second try.
- Do not treat your main owner's money as unlimited: when the 75% holder would not put in more, no other route was left. Find the alternative investor before a crisis starts.
- Do not leave negotiation to the final month: when a search begun in October 2022 stalled in March 2023, 85% of staff went at once. Work out the failure scenario months ahead.

## Sources

- [Virgin Orbit sells assets in bankruptcy auction to Rocket Lab, Stratolaunch and Vast's Launcher](https://www.cnbc.com/amp/2023/05/23/virgin-orbit-bankruptcy-sale-rocket-lab-stratolaunch-vasts-launcher.html)
- [Virgin Orbit's launch business sold for parts to Vast, Stratolaunch and Rocket Lab](https://techcrunch.com/2023/05/23/virgin-orbits-launch-business-sold-for-parts-to-vast-stratolaunch-and-rocket-lab)
- [Virgin Orbit files for bankruptcy protection in the U.S. after failing to secure funding](https://www.nbcnews.com/news/us-news/virgin-orbit-files-bankruptcy-protection-us-secure-funding-rcna78062)
- [Virgin Orbit files for bankruptcy, cuts 85% of workforce](https://www.manufacturingdive.com/news/virgin-orbit-85-percent-workforce-laid-off/646694/)