Virgin Orbit, the rocket company founded by British billionaire Richard Branson, has filed for bankruptcy in the United States.
The California-based company filed for Chapter 11 bankruptcy, which will allow it to continue operating while it restructures its debts. The company has struggled to secure additional funding and has been hit hard by the COVID-19 pandemic.
Virgin Orbit’s CEO, Dan Hart, said in a statement that the company’s “cutting-edge launch technology” would be attractive to buyers as they continue to look for a new owner.
Virgin Investments, one of Virgin Orbit’s sister companies, has agreed to inject US$31.6 million into the satellite launcher to help it stay afloat while the business searches for a new owner.
However, the company still faces an uncertain future. This announcement comes just days after Virgin Orbit announced it would lay off around 85% of its workforce to reduce expenses.
Virgin Orbit was founded in 2017 with the goal of making small rockets, called LauncherOne, that could deliver lightweight satellites to orbit quickly and cheaply. The rockets take off from modified Boeing 747 planes.
Virgin Orbit was one of several companies, including Jeff Bezos’s Blue Origin, that has attempted to commercialize satellite launching.
Virgin Orbit has completed four previous successful launches from California.
However, the company ran into trouble in January when one of its rockets failed to make it to orbit due to an overheated engine. It was the company’s first attempt to launch a satellite from UK soil.
Virgin Orbit’s bankruptcy underscores the challenges of the space industry, which has seen increasing competition and a shift toward more commercialization.
The COVID-19 pandemic has also impacted the industry, as supply chains have been disrupted and investors have been more cautious about funding high-risk ventures.