Aerospace group Boeing will invest $20m in Richard Branson’s Virgin Galactic when the company goes public later this year, beginning what the two sides said would be a new collaboration in the scramble for space tourism.
The partnership announced on Tuesday comes three months after Virgin Galactic agreed to merge into a Us-listed cash shell launched by former Facebook executive Chamath Palihapitiya, as it ramps up its effort to send customers on 90-minute rides to the edge of space.
Boeing’s investment in new Virgin Galactic shares, which is contingent on the merger closing, will be made out of its Horizonx Ventures start-up investment arm and comes with a promise to work together.
Boeing is heavily into space exploration, serving as a main contractor for Nasa’s planned Space Launch System for future manned flights into deep space and also working on a reusable space capsule to the International Space Station.
The new partnership gives Boeing a stake in a potentially lucrative race targeting the wealthiest tourists. Virgin Galactic is the only private company to send people to the edge of space in commercial vehicles, making it a leader in a field in competition with Elon Musk’s Spacex and Jeff Bezos’s Blue Origin.
The merger with Mr Palihapitiya’s cash shell, Social Capital Hedosophia, provides Virgin Galactic with publicly traded shares without having to go through the traditional initial public offering process and returns some cash to its financial backers. Social Capital will emerge with 49 per cent of the company, which it estimated would have an enterprise value of $1.5bn.
Laura Seward Forczyk, founder of space sector consulting firm Astralytical, said while Boeing’s investment was significant as a partnership, despite being relatively modest financially.
“I think this is just the beginning,” she said. “Boeing brings over 100 years of flying experience and a significant investment of space travel. As Virgin gets closer to sending passengers into space we will see more Boeing involvement.”
