Virgin Orbit close to raising $200 million in new funding

According to an exclusive report from Reuters, Virgin Orbit is close to raising $200 million in new funding from Texas-based venture capital investor Matthew Brown.

The company plans to restart operations on March 23 and recalls a number of its employees in preparation for its upcoming mission, although Virgin Orbit did not comment on the potential deal.

The news came nearly three months after Virgin Orbit rocket LauncherOne launched from a jumbo jet, an anomaly that prevented it from deploying nine small satellites into lower Earth orbit.

The deal could give Richard Branson's financially challenged space startup, which has been struggling with diminishing cash reserves and increasing losses amidst fierce competition in the market.

According to the non-binding term sheet, Virgin Orbit and Matthew Brown are aiming to close the deal on Friday, which is not binding and remains subject to a final agreement. An individual familiar with the matter told Reuters that Virgin Orbit s board approved the transaction at a meeting on Tuesday.

Matthew Brown will be able to convert his preferred shares worth $200 million in Virgin Orbit to common shares at the volume-weighted average price in the 30 days leading up to the signing of the deal.

The market value of the satellite launch company has fallen to a historic low of $150 million as of Tuesday, a drop from its previous value of over $3 billion two years ago when it went public through a blank-check deal.

Virgin Orbit's mission is to provide affordable and flexible launch services for small satellites using a unique air-launch system that allows rockets to be launched mid-flight from a modified Boeing 747 aircraft named Cosmic Girl The company went public in July 2019 through a special purpose acquisition company SPAC deal, founded in 2017 by billionaire Richard Branson as a subsidiary of Virgin Group, a British multinational conglomerate. Social Capital Hedosophia, founded by venture capitalist Chamath Palihapitiya, was created by the SPAC and was specifically set up to acquire a technology company and take it public.

Since the SPAC deal, Virgin Orbit has faced financial challenges and has struggled to secure additional funding. As mentioned in the previous question, the company's market capitalization has decreased significantly.

It is worth noting that the SPAC deal that took Virgin Orbit public is separate from the SPAC deal that Richard Branson's other space company, Virgin Galactic, used to go public in 2019. Virgin Galactic focuses on space tourism and Virgin Orbit specializing in satellite launches, with the two companies focused on different areas of the space industry.