What to Know
Virgin Galactic is set to be the first publicly-listed company with plans to send tourists to space.
Social Capital Hedosophia will merge with Virgin Galactic, owning a 49% stake in the firm.
Branson’s space unit has so far already sold 600 tickets to aspiring astronauts, raking in $80 million.
British billionaire Richard Branson’s space-tourism unit Virgin Galactic plans to go public later this year, the company announced Tuesday.
The firm will list its shares as part of a merger deal with Social Capital Hedosophia, a special-purpose acquisition company (SPAC) created by venture capitalist Chamath Palihapitiya.
Social Capital Hedosophia, formed by Palihapitiya’s Social Capital and venture capital firm Hedosophia in 2017, will invest $800 million for a 49% stake in the combined company. The firm will have an enterprise value of $1.5 billion, Virgin Galactic said.
The news was first reported by the Wall Street Journal.
Branson’s space venture would be the first publicly-listed human spaceflight firm, with the stock market listing slated to take place in the second half of 2019.
Branson had been in talks with Palihapitiya since he suspended talks over a Saudi investment in his space companies last year. Riyadh had planned to invest a total of $1 billion into Virgin Galactic and Virgin Orbit, which focuses on small satellites, but the deal fell through over the murder of journalist Jamal Khashoggi.
The billionaire business magnate, who founded Virgin Galactic in 2004, is currently locked in a tense space race with rivals including Tesla CEO Elon Musk’s SpaceX and Amazon boss Jeff Bezos’ Blue Origin.
Bezos’ space venture is vying to take humans to the moon by 2024, while Musk’s efforts have been less about space tourism and more focused on cargo missions. Musk has however said in the past that it would be “pretty cool” if people paid to go to space on SpaceX’s recently unveiled Crew Dragon ship.
Virgin Galactic, meanwhile, has so far already sold 600 tickets to aspiring astronauts, raking in $80 million in the process. The company’s VSS Unity ship was launched into space with three astronauts on board in February, carrying a test passenger to the edge of space for the first time.
“Great progress in our test flight program means that we are on track for our beautiful spaceship to begin commercial service,” Branson said in a statement Tuesday.
“By embarking on this new chapter, at this advanced point in Virgin Galactic’s development, we can open space to more investors and in doing so, open space to thousands of new astronauts."
Branson’s bid to achieve human spaceflight hasn’t been without setbacks, however. Virgin Galactic’s SpaceShipTwo suffered a fatal crash in 2014 that killed the co-pilot and seriously injured the pilot.
Virgin Galactic will be merging with Social Capital Hedosophia, an SPAC. SPACs are publicly-traded investment firms that raise money through an initial public offering to buy an existing company. In Social Capital Hedosophia’s case, Palihapitiya’s SPAC is buying just under half of the company to help it enter the public market.
Palihapitiya said he is also investing $100 million of his own cash into the combined company as part of the deal. The former Facebook executive will also become chairman of the group.
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