Boeing’s venture arm Horizon X is investing $20 million in Virgin Galactic, the space-tourism venture founded by Richard Branson. Virgin Galactic has invested $1 billion to develop reusable spaceflight systems to create space tourism.
The investment comes as Virgin Galactic prepares to list public shares through a merger with Social Capital Hedosophia in what the companies said would be the first publicly traded space tourism company.
The latest investment from Boeing is contingent on the closing of that deal, after which Boeing will get new shares in the post-combination company.
SCH was founded in 2017 by venture capitalists including Chamath Palihapitiya, who is reportedly investing $100 million in Virgin Galactic, and former Twitter executive Adam Bain.
The SCH partnership with Virgin Galactic was initially valued at $1.5 billion, based on anticipated earnings of $600 million in 2023.
“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,” said Brian Schettler, senior managing director of Boeing HorizonX Ventures.
The company had been set to receive a $1 billion investment from the Saudi Arabia Public Investment Fund, but that deal was suspended following the murder of Washington Post journalist Jamal Khashoggi at the Saudi consulate in Turkey last October.
The company said it has taken deposits from hundreds of prospective passengers, at half the total fair price of $250,000, for 90-minute flights. Last December, a Virgin Galactic rocket completed a successful test flight and landed in the California desert. The company faces competition from Blue Origin, backed by Amazon founder Jeff Bezos, and SpaceX backed by Elon Musk.
Boeing is NASA’s prime contractor for the International Space Station and is building a reusable capsule for the station. The company also announced it was investing in a startup accelerator focused on growth of startups in the U.K. aerospace industry.
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