Scottish rocket startup nears collapse despite £26m in taxpayer loans | Aerospace industry
A British space company hoping to launch the first domestic rocket from Scotland is on the verge of collapse, threatening 150 jobs and casting doubt on the UK’s extraterrestrial ambitions.
Orbex, based in the Scottish Highlands, is lining up administrators as hopes fade that it will strike a rescue deal or raise funds despite receiving a £26 million government loan last year.
The startup had planned to launch a rocket from a base in the Shetland Islands and was on the verge of conducting its first test flights in 2026, according to company CEO Phil Chambers.
The company was also in talks to raise fresh cash from the Treasury-backed Sovereign Wealth Fund, but that deal fell apart at an “early stage” of talks late last year, a source with knowledge of the situation said.
Launch plans were also negatively impacted by repeated delays, and Orbex eventually turned to a potential German buyer, The Exploration Company, which was developing a reusable spacecraft. On Wednesday, Orbex said it was examining various merger and acquisition options to stay afloat, but none had come to fruition.
“Disappointment doesn’t describe how we feel about this moment,” Chambers said. “We are successfully developing a sustainable, world-class sovereign space launch capability for the UK and were on the verge of our first test flights later this year.”
He added: “It’s no secret that designing and building space rockets to enable a launch service is a capital-intensive, highly advanced process and has a long development cycle that creates a ‘scale-up’ funding gap. Corporate support is crucial to closing this gap, and we have worked tirelessly to find both financing and recovery solutions.”
Business Secretary Peter Kyle approves £20m taxpayer-funded loan to Orbex in January 2025He hails the plan to launch small satellites into orbit as one that will “transform the UK space industry”.
At the time, Dr D., who will leave his post as director general of the UK Space Agency next month. Paul Bate said Orbex would “inspire new generations to reach for the stars.”
Last summer, technology secretary Liz Kendall gave the startup a further £6m loan designed to help it pursue a £150m contract with the European Space Agency to help develop alternatives to Elon Musk’s SpaceX in the US.
Orbex was planning to launch small satellites into orbit using its 19-meter-long low-carbon rockets. It was initially developing its own home spaceport on the A’Mhòine peninsula in the Highlands, but was eventually forced to shelve the project and move its planned launches to SaxaVord, a base in the Shetland Islands.
The launch would be the first from UK soil since British billionaire Richard Branson’s failed Virgin Orbit mission in 2023.
A government spokesman said: “We remain committed to supporting our dynamic space sector. We recognize this will be a very worrying time for Orbex staff. Space launch is a highly competitive industry and it has always been the case that some companies will succeed while others will fail.”
“In due course we will reveal more details about our plans to develop key national space capabilities, including launch. Decisions made will focus on ensuring maximum impact for taxpayers’ money.”
