Launch company Virgin Orbit has joined the growing number of space companies to use a special-purpose acquisition company (SPAC) to fund its future development by merging with NextGen Acquisition Corp II, a SPAC that holds US$383 million in its trust account. The deal, announced on 23 August, values Virgin Orbit at US$3.2 billion and is expected to complete in Q4 2021, when the combined company will be publicly traded on the Nasdaq under ‘VORB’.
An additional US$100 million is being provided by a private investment in public equity (PIPE) round led by companies including Boeing and AE Industrial Partners, existing Virgin Orbit investors and NextGen. So, assuming no stock redemptions (an important proviso), the process will provide Virgin Orbit with a total of US$483 million to “further scale rocket manufacturing to meet customer demand” and generally fund growth in its space business, according to a statement by the company.
Current Virgin Orbit shareholders, including Virgin Group, Mubadala Investment Company and individual managers and employees, are expected to retain about 85 per cent of the combined company. NextGen’s public shareholders are expected to own approximately 10 per cent, with 3 per cent for PIPE investors and 2 per cent for the SPAC sponsor, according to the statement. Sir Richard Branson, the Founder of Virgin Orbit, said: “I’m very excited we are taking Virgin Orbit public, with the support of our partners at NextGen and our other wonderful investors. It’s another milestone for empowering all of those working today to build space technology that will positively change the world.”
An image of Virgin Orbit’s 747 “Cosmic Girl” with a underslung LauncherOne rocket. Courtesy of Virgin Orbit
Virgin Orbit, which uses a customised 747 aircraft as a mobile mission control centre and reusable first stage for its two-stage LauncherOne rocket, was founded in 2017. Although the statement proudly announced that “Virgin Orbit has rapidly moved into successful commercial operations with three launches in just thirteen months and a 100% success rate on revenue-generating missions”, the payloads on its first launch in May 2020 failed to enter orbit. A second launch, in January 2021, delivered a dozen CubeSats to low Earth orbit and the most recent launch, conducted on 30 June, delivered seven CubeSats to LEO for commercial and national security customers.
In parallel with the SPAC deal, Virgin Orbit is investing in satellite constellations that provide Earth observation and the Internet of Things (IoT) applications using the ‘Satellites as a Service’ model (whereby satellite capacity is leased rather than owned). Virgin Orbit’s IoT offering will focus, for example, on connectivity for ship management, aircraft, pipeline monitoring and intelligent agriculture. This investment will involve expansion beyond previously announced investments in satellite companies such as ArQit and HyperSat, as AE Industrial Partners is facilitating partnerships with BigBear.ai and Redwire.
The company announced in June that it planned one more launch this year followed by six in 2022, which should include a first mission from the UK’s Spaceport Cornwall. Past launches have flown from the Mojave Air and Space Port in California.
