Virgin Orbit Seeks Up to $200 Million, $1 Billion Valuation as Critical Launch Looms

Closeup on LauncherOne. (Credit: Kenneth Brown)

With a critical launch attempt looming at the end of the year, Richard Branson’s Virgin Orbit is seeking up to $200 million in investment that could value the company at $1 billion, The Wall Street Journal reported.

The fundraising comes as the British billionaire’s sprawling travel-to-finance empire and the wider commercial space industry have been hit hard by the coronavirus pandemic.

Virgin Orbit said in August it had hired LionTree Advisors LLC and Perella Weinberg Partners LP to look at potential financial transactions. Those banks are now charged with helping it raise between $150 million to $200 million by as early as the end of the year for capital expenditure and to fund satellite launches, according to the people familiar with the plans.

Virgin Orbit’s first launch attempt in May failed after a fuel line broke in the LauncherOne booster after it was dropped from its Boeing 747 carrier airplane over the Pacific Ocean. The rocket fired for about four seconds before the engine quit.

It is not uncommon for rockets to fail on their maiden flights. The second launch attempt, which the company wants to conduct by the end of the year, has taken on even greater importance with news the company is seeking additional investment to fund its operations.

Branson’s COVID-19 stricken companies have spent a lot of time raising money this year to keep his empire afloat. Publicly traded Virgin Galactic raised $460.2 million in a secondary offering in August.

Branson also sold about 10 percent of his holdings in Virgin Galactic earlier this year. The sale left the billionaire as a minority shareholder in the space tourism company.

Virgin Atlantic Airways raised about $1.5 billion from investors to stave off bankruptcy. Virgin Australia airlines, which the Virgin Group owned with three partners, went into administration and was sold off to investors.

The Virgin Group also raised $480 million for a special-purpose acquisition company (SPAC) named VG Acquisition Corp. that “will merge, buy or swap shares with other businesses in its core industries, which include travel and leisure, financial services, health, technology and mobile,” The Journal reported.

A SPAC is known as a blank-check company because funds are not raised for a specific business purpose. The company is publicly traded on the stock exchange while it looks for merger or acquisition targets. The acquired or merged company then trades under its own name.

Virgin Galactic went public last October after it completed a merger with a SPAC named Social Capital Hedosophia run by billionaire Chamath Palihapitiya. Momentus Space announced last week that it would go public via a SPAC created by Stable Road Capital.

With the travel and leisure industry having been hit hard by the COVID-19 pandemic, Virgin’s SPAC is likely hoping to acquire a number of struggling companies using investors’ money. The SPAC raised $80 million more than its $400 million target.