Boeing backs Virgin Galactic with strategic $20M investment

Virgin Galactic has $20 million more to pursue its goal of space tourism with a new investment from Boeing announced this morning. The two companies are both deeply involved in human spaceflight, but in different ways — and Boeing seems to feel that it’s better to join Virgin than try to beat them at this particular game.

VG is well on its way to its goal of being the first company to offer “routine, consistent and affordable” space tourism, though obviously the last item is relative. Its spacecraft have already been to space with people inside, essentially taking the same trip as what is planned for paying passengers — who, by the way, will embark from the recently unveiled Spaceport America in New Mexico.

The money came through through Boeing’s HorizonX Ventures, which has previously invested in some rather smaller scale aerospace startups, like Accion Systems and Matternet. The team there seems to prefer to give little cash injections here and there rather than back a major player with a sizable series A or the like.

Little context is offered for the investment; Quotes provided in a press release are more empty than usual, speaking only of the bright, vague future of human spaceflight. Why $20 million? Why now?

The investment will be contingent on new shares being issued in the new publicly traded company formed through a recently announced merger with Chamath Palihapitiya’s Social Capital Hedosophia. That’s expected to go forward in Q4 of this year.

Perhaps ahead of that event, and with Virgin founder Sir Richard Branson having walked away from a billion dollars offered by Saudia Arabia (in response to the Khashoggi murder), the company decided it could use a bit more relatively unstructured cash.

No specific partnerships or technologies are mentioned, simply that it is an “important collaboration,” in Branson’s words. CEO George Whitesides said he is “excited to partner with Boeing to build something that can truly change how people move around the planet.” “Something” that moves people around the planet? What else would either company build?

Boeing had probably been knocking on the door for a while, and they needed to get this funding on the books ahead of the merger, with specific collaborations and projects still on the drawing board and therefore with budgets only vaguely formed. “$20 million is probably fine,” I can imagine someone saying in a boardroom somewhere.

There’s no timeline on Virgin Galactic’s first commercial flight, but it’s conceivable it could be before the end of the year — a 2019 launch would be a nice feather to have in their cap, but either way there’s no shortage of customers; Reportedly some $80 million of commitments have already been made towards trips to space.

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