Richard Branson is a well-known billionaire, known for his adventurous spirit, innovative ideas, and successful business ventures. He has built an empire with multiple successful companies under the umbrella of the Virgin Group, including the highly successful airline, Virgin Atlantic, as well as dozens of other companies sporting the Virgin brand, focusing on a broad range of industries from hotels to telecommunications.
Branson’s achievements were so great that in 1999, the Queen of England formally awarded him a knighthood in honor of his services to entrepreneurship. Despite his impressive track record as an entrepreneur, Branson’s three most recent ventures – Virgin Galactic, Virgin Orbit, and Virgin Hyperloop – have been complete disasters and have threatened to bankrupt his entire empire.
Virgin Galactic is a space tourism company that aims to offer 90-minute space flights for $450,000. The company initially had a lot of hype after it went public by merging with one of Chamath Palahapatia’s SPACs. However, today, the company has never flown a single-paying customer into space and is burning cash at a rate of almost $2 million per day. Virgin Galactic, has been accused of sending faulty rockets into space and misleading investors about it. The company is 15 years late in its goal to launch a commercial space tourism service. In addition, the company is in a race against time to get regulatory approval before going bankrupt, and a mass casualty event could destroy the public perception of space tourism.
Virgin Galactic isn’t Branson’s only space-related company; he also founded Virgin Orbit, which had plans to launch small satellites into space. The satellites are released from a rocket attached to a Boeing 747 airplane and dropped from low Earth orbit. Virgin Orbit also went public via a SPAC, and the results have been even more disastrous than Virgin Galactic. In March of this year, the company was forced to temporarily lay off almost its entire staff as it ran out of cash to make payroll. The company filed for bankruptcy after failing to secure funding to stay afloat.
In 2017, the Virgin Group made a strategic investment in Hyperloop One, a California-based startup that hopes to transport passengers at high speeds in vacuum-sealed tubes. After the investment, the company was renamed Virgin Hyperloop, and Branson became the chairman, putting it firmly within the Virgin Empire. Despite spending hundreds of thousands of dollars on CGI renderings and other marketing materials, Virgin Hyperloop failed to live up to the hype and thus far has amounted to little more than a cash incinerator. The idea is economically unviable due to the Earth’s natural and man-made obstacles, and the project was stopped in 2022. They were forced to lay off half of their staff and abandon their previous plans to build a mass transit system. The company is now developing a hyperloop system to transport cargo from ports to distribution warehouses at high speeds.
This is coming at a time when the established companies of the Virgin Group are under severe pressure, with the airline Virgin Atlantic losing almost half a billion pounds in 2021 and expected to report another loss in 2022. Over the past three years, Branson has poured in hundreds of millions of pounds of his own money to keep the airline afloat. He funded these cash injections in part by selling his shares in Virgin Galactic, but now that his space company’s share prices are crashing, this may no longer be a viable option.
For the past three decades, Branson appeared to have the Midas touch, amassing a multi-billion dollar fortune by building disruptive companies. But now, his business empire looks to be teetering on thin ice. Richard Branson is a successful entrepreneur with his ventures in other areas although not in his space and transport ventures. It appears that his investing in businesses in which he has no comparable knowledge and experience has contributed to his major losses.
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