Boeing says it’s planning to invest $20 million in Virgin Galactic once it goes public, potentially unlocking a new level of synergy for commercial space travel.
For Virgin Galactic, the deal will provide an extra dose of cash — but also access to Boeing’s decades of expertise in providing aerospace products and services.
In return, Boeing will have an inside track to the market for commercial space travel — which is part of CEO Dennis Muilenburg’s vision for a continuum of aerospace transportation. “Space tourism, space factories … that whole ecosystem is evolving, and we’ll be deeply involved in the transportation system that will enable access,” Muilenburg said last October at the GeekWire Summit.
“Boeing’s strategic investment facilitates our effort to drive the commercialization of space and broaden consumer access to safe, efficient and environmentally responsible new forms of transportation,” Schettler said. “Our work with Virgin Galactic, and others, will help unlock the future of space travel and high-speed mobility.”
The investment from Boeing’s venture capital arm is designed to kick in once Virgin Galactic closes a transaction to become a publicly listed entity, via a business combination with Social Capital Hedosophia Holdings Corp. That’s expected to happen by the end of the year.
Boeing would receive shares in the company that emerges from the transaction.
Virgin Galactic has been working on its SpaceShipTwo suborbital rocket plane and WhiteKnightTwo carrier airplane since 2004 — when SpaceShipTwo’s predecessor, SpaceShipOne, won the $10 million Ansari X Prize.
Since then, Virgin Galactic has devoted $1 billion in investments to developing SpaceShipTwo. The company and its partners at Scaled Composites weathered two fatal accidents along the way, but last year Virgin Galactic finally sent its second SpaceShipTwo plane, VSS Unity, past the 50-mile space milestone.
More than 600 would-be passengers have put down as much as $250,000 each to take a ride once SpaceShipTwo goes commercial. The current schedule calls for that to happen next year, once Virgin Galactic finishes setting up operations at Spaceport America in New Mexico.
Over the longer term, Virgin Galactic aims to beef up its launch system and offer point-to-point suborbital space trips. Boeing’s investment and expertise are likely to further that goal.
“This is the beginning of an important collaboration for the future of air and space travel, which are the natural next steps for our human spaceflight program,” said Richard Branson, the billionaire founder of Virgin Galactic. “Virgin Galactic and Boeing share a vision of opening access to the world and space, to more people, in safe and environmentally responsible ways.”
The two companies promised to provide additional information about the projects they plan to pursue together at a future time.
Both companies have lots of other connections in the spaceflight market: Boeing is developing its own orbital-class spaceship known as the CST-100 Starliner, which is designed to be launched by rockets built by United Launch Alliance (a Boeing-Lockheed Martin joint venture).
Starliner is expected to start flying astronauts to the International Space Station for NASA next year. It could also fly paying passengers to the space station or future orbital destinations under the terms of a deal that Boeing has with Virginia-based Space Adventures.
Last year, Boeing acquired a small-satellite manufacturer called Millennium Space Systems as a subsidiary. Boeing HorizonX Ventures has also invested in several space startups, including Accion Systems (focusing on electric space propulsion) to Reaction Engines (focusing on hypersonic flight).
Virgin Galactic, meanwhile, has two sister companies: Virgin Orbit, which is working on an orbital-class, air-launch system called Launcher One; and The Spaceship Company, which builds the SpaceShipTwo and WhiteKnightTwo planes.
In the suborbital spaceflight market, Virgin Galactic’s most prominent rival is Amazon CEO Jeff Bezos’ Blue Origin space venture. In the orbital spaceflight market, Boeing’s most prominent rival is Elon Musk’s SpaceX.