Virgin Orbit investing in startups as SPAC merger wraps up

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SANTA FE, N.M. — As Virgin Orbit prepares to complete its merger with a special purpose acquisition company (SPAC), the launch provider has announced a series of partnerships and investments to diversify its business.

Shareholders in NextGen Acquisition Corp. II are scheduled to vote Dec. 28 on its merger with Virgin Orbit announced Aug. 23. Such votes are usually the final step in closing a SPAC deal, turning Virgin Orbit into a publicly traded company on the Nasdaq.

When the merger was announced, the companies expected the deal to raise up to $483 million, of which $383 million was from the proceeds of the SPAC and $100 million in a private investment in public equity (PIPE) round that included AE Industrial Partners and Boeing as investors. That amount, though, is contingent on the amount of redemptions, where shareholders of the SPAC ask for their money back than hold shares in the merged company.

Virgin Orbit and NextGen announced Dec. 23 that the Virgin Group had agreed to invest up to $100 million as an additional PIPE. The companies said that specific amount “will be determined by the amount of investment, if any, required to satisfy the minimum cash condition as defined in the merger agreement.”

“This investment will ensure that Virgin Orbit has the capital required to go and build upon its incredible foundation and continue its rapid transition into a successful commercial space launch company,” Virgin Orbit founder Richard Branson said in the statement.

The co-founders of NextGen, George Mattson and Gregory Summe, said in the statement that the commitment from the Virgin Group means “we believe we have a clear path to a successful closing of our merger” pending the shareholder vote on Dec. 28.

As the SPAC merger closes, Virgin Orbit has been announcing a series of investments and partnerships with satellite manufacturer and operator startups. Among the announcements was a $30 million Series B investment by Virgin Orbit into Polish company SatRevolution Dec. 14, valuing that company at $150 million. SatRevolution is developing a smallsat constellation of imaging satellites and has launched some of its satellites on Virgin Orbit’s LauncherOne.

Virgin Orbit announced Dec. 15 it is taking a 17.5% stake in Hypersat, a Virginia-based geospatial analytics company developing a constellation of hyperspectral imaging satellites that will be launched by Virgin Orbit. The companies did not disclose the dollar value of that investment.

On Dec. 21, Virgin Orbit said it was taking an equity stake into Horizon Technologies, a British company developing satellites for maritime domain awareness. Virgin Orbit will be the preferred launch provider for Horizon’s satellites.

Those investments join earlier ones Virgin Orbit made in Sky and Space Global, a company working on a constellation of communications satellites, and Arqit, a British quantum computing company. Arqit announced Dec. 23 that it signed a contract for two dedicated LauncherOne launches of satellites that will support its quantum encryption technology.

Those investments, Virgin Orbit executives say, fit into the company’s strategy to expand beyond launch services into broader space services, such as communications and imaging. “As we grew up as a launch company and interacted across the community,” said Dan Hart, chief executive of Virgin Orbit, during a panel discussion at World Satellite Business Week Dec. 15, “we were invited by multiple companies to participate in their business and to take a share.”

That led to the development of a strategy for a satellite solutions business line that includes those investments. “We can get capacity, we can participate with our customers in their business, and we can integrate and create another level of information and capability to deliver to customers,” he said. “We are moving into that satellite solutions part of the space economy while we build up our launches for commercial, national security and civil space.”

“As a launcher, we’re in discussions with every single company, pretty much, out there,” Hart said in a Dec. 22 webinar by IPO Edge about the upcoming merger with NextGen. “We naturally had started to develop relationships and partnerships where we would take either some equity stakes or commercial deals where we would get access to capacity in the systems.”

Virgin Orbit’s near-term emphasis, though, remains on launch with its LauncherOne system. The company’s next mission, called “Above the Clouds,” is now scheduled for no earlier than Jan. 12 from the Mojave Air and Space Port in California after slipping from December. That launch will carry satellites for SatRevolution, Spire Global and the U.S. Defense Department’s Space Test Program.

Hart said Dec. 22 that, after the Above the Clouds mission, he expected Virgin Orbit to perform five to six more launches in 2022. That will include a launch from Spaceport Cornwall in England in mid-2022. He said Virgin Orbit has a goal of 18 launches in 2023.