- [Announcer] Here goes Cosmic Girl.
- [Narrator] This might look like a normal airplane flight.
- [Announcer] And yes, we are wheels up.
- [Narrator] But once it's in the sky,
it's clear it's actually a rocket launch.
Richard Branson's Virgin Orbit made a big bet
on launching satellites from Airborne 747s.
It was expected to be a cheaper
and more flexible method than traditional Rocket launches.
- [Announcer] And liftoff of Starlink 2-A.
- [Narrator] But that bet hasn't paid off.
In March, Virgin Orbit laid off 85% of its staff
and filed for bankruptcy in April.
- Our runway was set and our runway was shorter
than perhaps we needed.
- [Narrator] So, what went wrong?
Virgin Orbit started out as a branch of Richard Branson's
larger space venture, Virgin Galactic, in 2012.
- Richard Branson as has Elon Musk, as has Jeff Bezos,
talks about space as an aspirational goal,
as something about which he's passionate
and believes is important.
- [Narrator] Carissa Christensen is an analyst
who has been working in the space industry for 30 years.
- That aspirational vision is an unusual part
of this business compared to an awful lot of others.
- [Narrator] In 2012, there was a growing market
for small satellites.
They're typically cheaper
and easier to build than larger ones.
But launching them was another story.
Most had to hitch a ride on larger conventional launches
which were difficult to come by
and sometimes didn't drop the satellite in the right place.
So while Virgin was developing
its spacecraft for human launches,
it saw another opportunity.
- Say hello to Launcher One.
- [Narrator] Launcher One was a small launch vehicle
that Virgin positioned as a small satellite solution.
Small launch vehicles
were a fairly small industry at the time.
Launcher One was one of two new vehicles
that went into development in 2012.
- The investment thesis being that,
those small satellites would value the opportunity
to be launched on a smaller launcher
because they could go where they wanted,
when they wanted and the total launch cost would be lower.
- [Narrator] As Branson told CNN,
- The current cost's about $40 million, $30, $40 million.
We'll be able to do it for less than $10 million.
- [Narrator] Virgin planned to achieve this
using that unique method of putting its rockets
on modified Boeing 747s.
In typical launches, rockets need one of these,
a powerful stage one booster
to send it straight up into the atmosphere
before smaller stage two engines take over.
Using a jet presented a faster, more flexible,
and reusable way to get Launcher One closer to orbit
before detaching to finish the trip.
No launchpad required.
- The idea that you could launch
from anywhere and that you would have flexibility
with regard to when you launched was very attractive.
And because you're not competing for launch sites
that was the thought that Virgin could provide that service.
- [Narrator] Then in 2017, Orbit spun off of Galactic,
with former Boeing executive Dan Hart at the helm.
But there was an issue.
It still hadn't had a single launch
and competition in the space was growing.
In 2020, the company made its first launch attempt
but it wasn't successful.
- Some disappointment that we didn't get
to finish the flight and take it to orbit
but we were all prepared for that.
We collected an enormous amount of data
- [Narrator] To bring in revenue,
the company needed to be making regular launches.
In the meantime, Virgin Orbit was burning through cash.
Analysts estimated the company
had spent more than 400 million developing its launch system
and it looked to raise more.
Then in January, 2021, success.
- [Announcer] Launcher One's in space.
- [Narrator] The company deployed
10 small satellites into orbit for the first time.
It made its first commercial launch in June.
- I think Orbit right now are gonna
concentrate on satellites into orbit and you know,
and just ramp up, you know, ramp up their capabilities
- [Narrator] And ramp up their finances.
Virgin Orbit decided to go public through a merger
with a special purpose acquisition company or SPAC.
- An earlier stage company trading publicly
has a level of scrutiny and visibility into what it's doing
that's very challenging for a company at that stage.
- [Narrator] But the listing didn't generate
the 483 million Virgin Orbit was looking for.
Instead, it ended up with less than half that.
While Virgin continued its launches in 2022,
larger launches were becoming more accessible.
New ride share options like one with SpaceX,
catered to small satellite companies,
and advances in technology made it easier
to drop satellites in the right spot
unlike earlier large launches.
- It really is the taxi versus a bus.
If you take a taxi, you'll pay a modest amount
compared to hiring a whole bus.
But if you just buy one seat on the bus
it's cheaper than taking the taxi.
- [Narrator] But Orbit still had one major relationship
it could potentially lean on to bring in more funding,
the UK Space Agency.
- A government entity, is a good customer for small launch.
And it was important for the UK
because the UK has been expanding its presence in space
and was looking for an opportunity
to conduct launch from the UK.
- [Narrator] So in January,
it planned the first ever launch to take place on UK soil,
but it didn't go as planned.
- It appears that Launcher One has suffered an anomaly
which will prevent us from making orbit for this mission.
- [Narrator] The failure caused Orbit stock
to fall 14% that day and it continued to slide.
- Investors are just not as risk tolerant.
There's not much capital available.
There are other places for that capital to go.
And so, particularly for a launch business
which needs a lot of capital, that becomes a problem.
- [Narrator] Virgin Orbit's layoffs and bankruptcy filing
followed in the wake of that failed launch,
- The satellite launch firm tied to British billionaire,
Richard Branson, failed to secure the funding needed
to keep operating.
- My point is, in this environment,
any execution failures are just gonna be magnified.
- [Narrator] CEO, Dan Hart,
said in a statement at the time
that the company must do what is best for the business.
Virgin Orbit declined to comment further for this video.
But this isn't necessarily the end for the company.
Virgin Orbit is hoping to find an investor
to buy them out of bankruptcy.
- I'm optimistic that will find a partner
who wants to take us forward.
- [Narrator] And for now,
the company is still planning more launches.
(cheerful music)