Virgin Galactic is set to be the first and only publicly-traded commercial human spaceflight company after announcing a merger with Social Captial Hedosophia. The move comes as Virgin Galactic – which has already ploughed over $1 billion into the business since its 2014 inception – believes it has overcome “a substantial number of the technical hurdles required to make the company a viable and profitable commercial service”.
The merger with Social Capital Hedosophia (SCH) injects around US$800 million into Virgin Galactic, providing the company with the support to reach commercialisation.
The arrangement will see SCH’s current shareholders own up to approximately 49% of the combined company.
“Virgin Galactic has built a unique, pre-commercial service order book of more than 600 space tourism customers backed by over $80 million in deposits. In a transforming world of experiences and social media, Virgin Galactic believes that the market for exclusive, experiential products will continue to expand quickly and represents a significant opportunity for future growth,” the company said.
The transaction will see a new board, comprised of seven directors including SCH’s Adam Bain. George T. Whiteside will remain as CEO, and SCH’s Chamath Palihapitiya will be Chairman.
Virgin Group Founder, Sir Richard Branson, reconfirmed that after the successful space flight in February this year, the program remains “on track” to begin commercial service.
“By embarking on this new chapter, at this advanced point in Virgin Galactic’s development, we can open space to more investors and in doing so, open space to thousands of new astronauts,” Branson said.
We are at the dawn of a new space age, with huge potential to improve and sustain life on Earth. I am delighted that SCH has decided to become such an important part of our amazing journey. They share our dreams and together we will make them reality.
Sir Richard Branson, Virgin Group Founder
Virgin Galactic’s CEO, George Whitesides, said the investment will offer the company with the financial flexibility to “build a thriving commercial service and invest appropriately for the future”.
Chamath Palihapitiya, Founder and CEO of Social Capital Hedosophia, said his company was confident that Virgin Galactic was “light years ahead of the competition.
“I cannot wait to take my first trip to space and become an astronaut,” Palihapitiya remarked.
The transaction is expected to be formalised in the second half of 2019.