Orbex, a Scottish rocket startup aiming to be the UK’s first domestic space launch provider, is on the verge of collapse despite receiving £26 million in taxpayer loans, throwing the future of Britain’s space ambitions into doubt and jeopardizing approximately 150 jobs.
The company, based in the Scottish Highlands, is preparing to appoint administrators as efforts to secure a rescue deal or attract further investment have failed. According to its chief executive, Phil Chambers, Orbex was “on the cusp” of conducting its first test flights in . The failure of Orbex represents a significant setback for the UK’s ambitions to establish a sovereign launch capability and compete in the burgeoning commercial space sector.
The company’s plans centered around launching small satellites into orbit from a base on the Shetland Islands. Initial plans for a spaceport on the A’Mhòine peninsula in the Highlands were abandoned in favor of the SaxaVord Spaceport on Shetland. The collapse follows repeated delays and a failed attempt to find a buyer in The Exploration Company, a German firm developing reusable spacecraft. “Disappointing doesn’t come close to describing how we feel about this moment,” Chambers stated. “We have been successfully developing a sustainable, world-class sovereign space launch capability for the UK and were on the cusp of our first test flights later this year.”
The situation highlights the inherent risks and substantial capital requirements associated with developing and scaling a space launch business. Chambers emphasized the “scale-up funding gap” inherent in the industry, noting the crucial role of “institutional support” in bridging the gap between development and commercial operation. Orbex had also pursued funding from the Treasury-backed National Wealth Fund, but those discussions stalled at an “early stage” late last year, according to a source familiar with the matter.
The UK government has invested heavily in Orbex, with Business Secretary Peter Kyle approving £20 million in loans in , framing the project as a potential “transformative” force for the UK space industry. A further £6 million loan was awarded last summer by Technology Secretary Liz Kendall, intended to support Orbex’s pursuit of a £150 million contract with the European Space Agency to develop alternatives to SpaceX. These investments underscore the government’s commitment to fostering a domestic space launch capability, but also raise questions about due diligence and risk assessment in allocating public funds to high-risk ventures.
The failure of Orbex follows the collapse of Virgin Orbit in , after a failed launch attempt from UK soil. That mission, also intended to mark the beginning of regular space launches from the UK, ended in failure, highlighting the technical challenges and financial vulnerabilities inherent in the space launch industry. Orbex’s situation further complicates the UK’s position in the global space race, potentially hindering its ability to capitalize on the growing demand for small satellite launch services.
A government spokesperson acknowledged the difficulties facing Orbex and expressed concern for its employees. “We remain committed to supporting our dynamic space sector,” the spokesperson said. “We recognise this will be a very worrying time for staff at Orbex. Space launch is a highly competitive sector, and it has always been the case that some companies will succeed, while others will fail.” The government indicated that it would release further details regarding its plans for developing national space capabilities, including launch infrastructure, with a focus on maximizing taxpayer value.
The Orbex collapse sends a chilling message to other UK-based space startups and investors. While the government maintains its commitment to the sector, the failure of two prominent launch companies within a relatively short period raises serious questions about the viability of the UK’s current approach to fostering a domestic space industry. The incident will likely prompt a reassessment of funding models, risk management strategies, and the overall competitiveness of the UK space sector on the global stage. The immediate priority will be mitigating the impact on the 150 jobs at risk and ensuring a smooth transition for Orbex’s assets and intellectual property.
The situation also underscores the broader challenges facing the space launch industry, characterized by high capital expenditure, long development cycles, and intense competition. While demand for space-based services continues to grow, the path to profitability remains elusive for many companies, particularly those attempting to establish independent launch capabilities. Orbex’s failure serves as a cautionary tale for investors and policymakers alike, highlighting the need for careful planning, robust risk assessment, and sustained financial support to navigate the complexities of the space economy.
