Virgin Orbit’s much-hyped launch from Cornwall, U.K. on Monday ended in failure, with the company announcing that the mission experienced an “anomaly” that prevented the rocket from reaching orbit.
The “Start Me Up” mission attracted much attention; not only was it the company’s sixth launch, it was also billed as the first-ever space flight from the United Kingdom and the first-ever orbital launch attempt from the new Spaceport Cornwall, in southeast England. (Other U.K.-based rocket companies, like Orbex and Skyrora, are racing to be the first to conduct a vertical rocket launch from U.K. soil.)
But the anomaly may prove to be a very costly mistake for the company, which has been on shaky financial ground since going public in 2021. The first miscalculation occurred shortly after the company completed its merger with special purpose acquisition company NextGen Acquisition Corp. II at the end of 2021. Virgin Orbit only garnered $228 million in gross proceeds from the merger, falling far short of the projected $483 million the company projected it would receive from the transaction.
That shortfall was followed by dwindling cash reserves. In the company’s most recent quarterly earnings report, it said that as of September 30 it had $71 million cash on hand. The company then received a $25 million injection from Richard Branson’s Virgin Group and $20 million from Virgin Investments Ltd. But even with these additional funds, it’s unclear if the company has enough financial runway without needing to seek additional capital.
The company’s previous financial projections have also raised eyebrows. While it’s not unusual for earnings presentations to contain fanciful forecasts, some of those issued by Virgin Orbit have stretched even the most ambitious imaginations. In 2021, the company estimated it would hit $2.1 billion in revenue by 2026. Given that each LauncherOne costs on average of around $12 million, that would mean the vehicle would need to fly a whopping 175 times per year. Keep in mind that SpaceX, far and away the world’s leading launch provider, just hit a record 61 annual launches last year. Virgin Orbit was essentially saying that it would be three times as successful, measured by launch cadence, than SpaceX in just five years.
This is not to say that Virgin Orbit has not had its successes. Indeed, out of the six launch attempts so far, four have been successful. That’s not a rate at which to scoff. But as is becoming more and more clear, at some point, all launch companies have to start making revenue. Otherwise it’s just burned cash, and not much to show for it.
Source @TechCrunch
