Matthew Brown Companies confirms it's in funding talks with Virgin Orbit SpaceX and OpenAI backing venture capitalist Matthew Brown, of Matthew Brown Companies, has confirmed that his group is in funding talks with space biz Virgin Orbit. Brown declined to go into further detail, but according to a leaked term sheet seen by Reuters, that funding amounts to $200 million, which, by virtue of the fact …
I've followed the arguments backwards and forwards about horizontal launch, and I'm not sure who's right from a technical standpoint.
But, as a VC, it's a no brainer: Virgin are doing something different. Most likely it fizzles out and dies. But if it succeeds---and really succeeds---you've hit the jackpot. If you've already got bets on vertical, then a horizontal gives you an each way. Providing the company looks well run and its goals achievable, then it's a worthwhile bet. And the failed launch, demonstrates they can do the fundamentals; there's no reason to think they can't fix the gremlins. But that "failure" plus a cash shortage means the company is going for a song.
TL;DR If I had millions, I'd be investing in them, too.
To be fair to Virgin, when they started development on LaucherOne, it wasn't obvious that reusable rockets were a reasonable bet and SpaceX made a huge gamble on them working out. Indeed, prior to Falcon 9 reusable concepts had consistently either failed entirely or proven to be massive cash holes. At the same time, air launch just doesn't net you that much gain because getting to orbit is primarily about going sideways really fast, with the altitude being secondary. You get minor advantages from the thinner atmosphere too, which does make a small rocket with a small payload more economical but these aren't large gains either. The biggest benefit, from a VC standpoint, is the showmanship of a rocket strapped to a plane which, to be fair again, is something of an achievement.
I'm not privy to Virgin's market research or development plans but, for this to really succeed they either need very particular customers, a quantum leap that reduces the cost of their manufacturing process or something that lets them reuse their rockets. As it stands, the sort of customer they're after would need to have something that stops them from putting a transfer stage below their package and fly it on a Falcon 9, be that technical or a disagreement with SpaceX so profound that they're happy to pay over an order more to get up there.
"Brown declined to go into further detail, but according to a leaked term sheet seen by Reuters, that funding amounts to $200 million, which, by virtue of the fact of the leak and the subsequent share price rise, is just $20 million shy of Virgin Orbit's current market capitalization. If the deal goes through, the VC wouldn't just get controlling interest, but become the de facto owner."
If Brown "injects" $200m, and becomes the de facto owner, then either he bought the company by paying that £200m to the current owner(s) and there's still no money to run the company with or he's basically lending the money to them, in which case he's not buying shares in the company, but obviously will have a level of say. Does anyone know how this actually works? Is Branson or whoever actually owns the company selling it for like $1 maybe?
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