Virgin Orbit’s Swift Descent

Samson Amore

Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.

Virgin Orbit’s Swift Descent
Image courtesy of Virgin Orbit

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Workers at satellite startup Virgin Orbit are reeling after learning they were furloughed, forced to stop work indefinitely since the company is fast running out of cash.

Virgin Orbit paused all operations March 16, furloughing all of its more than 750 employees. It’s reportedly scrambling to avoid a bankruptcy filing. The company was founded in 2017 by billionaire Richard Branson.


Up to now, there’s been a relatively limited number of space startups able to demonstrate a strong enough track record to threaten SpaceX’s vice grip on government contracts. These include Relativity Space, which is gearing up for its third launch attempt of its first 3D-printed rocket this week. There’s also Impulse Space, which will launch its first satellite to transport payloads in space on a SpaceX flight by the end of this year and is also partnering with Relativity to send a lander to Mars. And Long Beach-based Rocket Lab is also a player, having sent a reusable rocket into space on July 4 of last year.

But each of these companies has found the road to launch is often packed with speed bumps, and none have been able to truly challenge SpaceX’s dominance of regular, affordable launches.

It remains to be seen how the fallout from Virgin Orbit’s collapse affects its big sister company, Virgin Galactic. Virgin Orbit is technically a spinoff of Virgin Galactic – another space-focused pet project of Branson that’s focused on commercial spaceflight (focused on human space tourism, rather than cargo).

Both companies are publicly traded. So far this year, Virgin Orbit’s stock has tanked nearly 93%, and it’s trading at barely $.50. In the last year, Virgin Galactic’s stock has lost more than 56% of its value and Bank of America recently rated it a sell. When it went public through a SPAC deal in 2021, Virgin Orbit was valued at $3.7 billion.

So what went wrong? Here’s a look at some of the reasons why Virgin Orbit failed.

Method of launch

Virgin Orbit hasn’t sent a rocket to space successfully yet this year (it tried on Jan. 9 but scrapped the launch). That’s partly because of its unorthodox system for launching them.

The company uses air launch – dropping the rocket from a retrofitted Boeing 747 at high altitudes and letting the rocket’s boosters carry it the rest of the way to space. Branson touted this method as being more flexible and cost-efficient, because it meant Virgin Orbit wouldn’t have to spend on pricey launchpad leases. But there’s hidden costs, partly since Virgin Orbit has to maintain and fuel at least two crafts.

Air launching did work for several launches -- the company has four successful takeoffs so far, most recently in July 2022. But Virgin Orbit simply couldn’t launch at the pace it needed to in order to make enough money to stay solvent.

Cost

The rocket business is expensive. This saga’s made it clear even a billionaire founder can’t pump cash into a floundering company forever.

Virgin Orbit isn’t profitable; it lost $44 million in third quarter 2022, up from $38 million lost the year prior – compared to roughly $31 million in revenue.

CNBC reported that Branson’s contributed at least $60 million of his own cash recently. He’s thought to have spent at least $1 billion in total so far.

Virgin Orbit also retained Goldman Sachs and Bank of America to explore funding options ranging from minority investors to a full-on sale.

In 2022, Virgin signed an equity agreement with investors Yorkville Advisors, reportedly worth $250 million. But that deal wasn’t an outright cash investment, it allowed Yorkville to sell shares to public investors. So, that $250 million is mostly a phantom sum. In January, ArsTechnica accurately predicted Virgin Orbit’s monthly cash burn rate was $20 million, and that it would run out in March.

The government remains a reliable source of funding, though. If Virgin Orbit had made itself a viable competitor to other contractors, it might not be in this fiscal situation now. Virgin Orbit’s had four successful launches so far, including one for the U.S. Space Force. But unlike SpaceX, it’s failed to keep the feds from seeking other partners.

The overall economy

The fallout of Silicon Valley Bank’s bankruptcy has sent tremors through the larger tech investing community, all but freezing what was otherwise a difficult market. Space companies tend to raise larger rounds, which makes the funding ask from VCs all the more difficult.

That said, the fact that companies like Virgin Orbit are backed by billionaires means they could have less risk than others relying on banks. But, as we noted above, even a rich man’s pockets aren’t infinite.

It remains to be seen whether the VC ecosystem will rise to the challenge of investing back into space startups that are risky bets and often don’t guarantee immediate returns. But with growing operating losses, furloughed staff and talks of a buyout, Virgin Orbit might be the latest casualty of the chilling tech economy, and find itself.

Correction: An earlier version of this story misstated the number of launches Virgin Orbit has conducted. The company has undergone four launches since its founding. We regret the error.

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⚖️FTC’s "Click to Cancel" Rule and Its Ripple Effect on Tech

🔦 Spotlight

Happy Friday Los Angeles,

The FTC’s new “Click to Cancel” rule is shaking up subscription-based tech. Now, instead of navigating a maze of cancellation hurdles, users can cancel subscriptions as easily as they signed up—with a single click. This shift is a wake-up call for SaaS, streaming, and app-based companies, where once-hidden exit options often kept users around simply because canceling was a hassle.

The rule also requires businesses to send regular renewal reminders, ensuring customers stay informed about upcoming charges. It's more than a cancellation button—it’s about transparency and giving users control over their decisions.

For startups, the impact goes deeper than UX adjustments. Many have relied on "dark patterns," which subtly discourage cancellations by hiding the exit. Now, companies must shift toward building genuine loyalty by delivering real value, not by complicating exits.

While this might affect retention rates initially, it could lead to more sustainable business models that rely on satisfaction-driven loyalty. Investors may start prioritizing companies that emphasize transparent, long-term engagement over those that depend on dark patterns to maintain retention metrics.

The rule opens the door to more ethical UX design and a truly user-centered approach across the tech industry. It may even set a precedent against manipulative design in other areas, such as privacy settings or payment methods.

Ultimately, the “Click to Cancel” rule presents an opportunity for the tech industry to foster trust and build stronger customer relationships. Startups and established companies that embrace transparency will likely stand out as leaders in a new era of customer-centric tech, where trust—not tricky design—is what retains users.

As the tech landscape continues to evolve, LA Tech Week 2024 offers a chance to explore these shifts in real-time. Check out the upcoming event lineups to stay informed and make the most of your time:

For updates or more event information, visit the official Tech Week calendar.


🤝 Venture Deals

LA Companies

  • Ghost, a company supporting top brands and retailers with streamlined logistics and fulfillment solutions, raised a $40M Series C funding round led by L Catterton to fuel its continued growth and innovation. - learn more

LA Venture Funds
  • Assembly Ventures participated in a $27M Series A round for Monogoto, a provider of software-defined connectivity solutions that enable secure, cloud-based IoT and cellular network management on a global scale. - learn more
  • Angeleno Group participated in a $32M Series C round for REsurety, a company that recently launched an innovative clean energy marketplace aimed at providing better financial and operational insights to support renewable energy transactions. - learn more

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    🌴🧑‍💻 Your Guide to LA Tech Week 2024

    🔦 Spotlight

    Happy Friday Los Angeles,

    As many of you know, LA Tech Week is right around the corner, kicking off next Monday October 14th bringing together founders, creatives, investors, and engineers for a week of immersive events, panels, and socials across the city. From blockchain and AI to biotech and design, LA Tech Week is a chance to dive into the ideas shaping today’s technology landscape.


    What to Look Forward To

    Insights from Visionary Leaders: Hear firsthand from industry trailblazers as they share stories, challenges, and key lessons from their experiences. Expect fresh perspectives on AI, venture capital, biotech, and the ethical questions around emerging technologies.

    Interactive Panels: This week isn’t about watching from the sidelines; it’s about engaging directly with the tech community. Participate in hands-on panels discussing everything from startup scaling to ethical AI, with honest insights from those actively shaping these fields.

    Networking Mixers & Social Events: Meet and connect with founders, VCs, developers, designers, and fellow techies across LA. Rooftop mixers, lunch meetups, and creative gatherings offer the perfect chance to spark ideas and collaborate.

    Plan your week with the daily lineup, organized by location for easy navigation:

    For updates or more event information, visit the official Tech Week calendar.

    Enjoy LA Tech Week 2024!!


    🤝 Venture Deals

    LA Companies

    • Clout Kitchen, a Los Angeles and Manila based startup, has raised $4.45M in seed funding, co-led by a16z SPEEDRUN and Peak XV’s Surge, to develop AI-powered digital twins, which enables gaming creators to produce realistic virtual avatars for content and fan engagement. - learn more
    • MeWe, a privacy-focused social media platform, has raised an initial $6M in Series B funding led by McCourt Global to support Web3 integration and expand its decentralized network for 20 millions users. - learn more

      LA Venture Funds
      • EGB Capital participated in a $10M Series A funding round for MiLaboratories, which develops software that enables biologists to independently analyze complex genomic data, accelerating research and discovery in fields like drug development. - learn more
      • Crosscut Ventures participated in the $13.75M seed round for Airloom Energy, a company focused on developing airborne wind energy technology to harness high-altitude winds, with plans to accelerate a pilot project in Wyoming. - learn more
      • Overture VC participated in a $5.5M Seed funding round for Molg Inc., a company developing robotics and software for circular manufacturing, designed to disassemble electronics efficiently and recover valuable materials to reduce e-waste and support sustainable production. - learn more


        LA Exits

        • Options MD, a Los Angeles based telemedicine platform that provides care for people suffering from severe and treatment-resistant mental illness, is set to be acquired by Resilience Lab, an AI-driven provider focused on enhancing mental health care access. - learn more

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        LA Tech Week 2024: Saturday-Sunday Event Lineup
        tech-week

        Here’s what’s happening during the closing weekend (Oct 19 - Oct 20) of LA Tech Week 2024! Events are organized by location so you can easily catch the sessions that interest you most.

        SATURDAY EVENTS

        BEVERLY HILLS

        12:00 PM

        • BIG Showcase (Invite Only):

        BIG Showcase (Invite Only)

        2:00 PM

        Light Dao

        Struck Capital, Seahorse Express

        EAGLE ROCK

        12:00 PM

        Sunrise Integration, Shopify

        EL SEGUNDO

        9:00 PM

        Administratum, Valar Atomics

        HOLLYWOOD

        10:00 AM

        Passes

        MALIBU

        6:00 PM

        • Malibu Beachfront Investors Networking & Wine Tasting:See Details

        Gaya Ventures

        MARINA DEL RAY

        6:00 PM

        • Awaken Your Spirit: A Journey of Transformation (Invite Only)

        Sagos Distro, Alma Wellness

        SANTA MONICA

        7:00 AM

        Founders Running Club

        8:30 AM

        Techstars

        9:00 AM

        Magic Mind

        StartupStarter, Inc., City of Santa Monica

        10:00 AM

        Gen She

        AI LA

        Crea, Barry's, Unsubscribe

        10:30 AM

        Plantologist

        11:30 AM

        • Pickleball Palooza (Invite Only)

        YouTube

        1:00 PM

        • Realfren Games: From strangers to an inner Realfren within 52 weekends: See Details

        Office for Humanity and Circuit Works

        • Talking blockchain technology with special guests: See Details

        LadyDayDao

        5:00 PM

        KARD, What's Plots

        THE VALLEY

        7:00 AM

        Camino5

        VENICE

        9:00 AM

        Westside Yogis

        11:00 AM

        Open App

        1:00 PM

        Ripe and Teddy's Hot House

        4:00 PM

        • Fashion Forward: How AI is Redefining the Fashion Industry: See Details

        VIAVIA, BNTO.RENT, ALMA.AI

        VIRTUAL

        11:00 AM

        BLCK UNICRN

        WEST HOLLYWOOD

        7:00 PM

        Next Sequence

        SUNDAY EVENTS

        INGLEWOOD

        12:00 PM

        Entrepreneur Ventures, VCPE GROUPS

        PLAYA DEL RAY

        2:00 PM

        AI LA, DELL, NVIDIA

        SANTA MONICA

        10:00 AM

        • Women Founders, Cold Brew & Beach View, Rooftop: See Details

        Clutch Talent

        11:00 AM

        11DollarSunglasses.com, Less Litter Foundation

        12:00 PM

        Data in LA, Amplitude

        12:30 AM

        New Moon, Warner UK Innovations

        TOPANGA CANYON

        3:00 PM

        Dreamore

        VENICE

        8:00 AM

        • Surf session with founders, investors, creators: See Details

        Surfed Club, Bow Shock

        12:00 PM

        • Podcast Panel and Brunch: LA Tech Community Builders: See Details

        WeAreLATech.com, Blankspaces.com

        VIRTUAL

        2:00 PM

        BLCK UNICRN


        For updates or more event information, visit the official Tech Week calendar.

        Enjoy LA Tech Week 2024!


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