Scottish rocket startup nears collapse despite £26m in taxpayer loans | Aerospace industry
A British space company hoping to launch the first homegrown rocket from Scotland is on the brink of collapse, threatening 150 jobs and casting doubt on the UK’s extraterrestrial ambitions.
Orbex, which is based in the Scottish Highlands, is queuing up administrators as hopes fade of reaching a rescue deal or raising cash, despite receiving £26 million in government loans last year.
The startup had planned to launch a rocket from a base in the Shetland Islands and was “on track” to carry out its first test flights in 2026, according to its chief executive, Phil Chambers.
The company was also in talks to raise fresh funds from the Treasury-backed National Wealth Fund, but that deal collapsed at an “early stage” of discussions late last year, a source familiar with the matter said.
Launch plans also faced repeated delays and Orbex eventually turned to a potential German buyer, The Exploration Company, which is developing a reusable spacecraft. On Wednesday, Orbex said it had looked at several merger and acquisition options in an effort to stay afloat, but none of them had come to fruition.
“Disappointing doesn’t begin to describe how we feel about this moment,” Chambers said. “We have successfully developed a sovereign, sustainable and world-class space launch capability for the UK and were set to carry out our first test flights later this year.”
He added: “It is no secret that the design and construction of space rockets to enable launch service is a very advanced and capital-intensive process with a long development cycle that creates a large-scale funding gap. Institutional support is crucial to bridging this gap and we have worked tirelessly to try to find financing or salvage solutions.”
Peter Kyle, the business secretary, approved £20m of taxpayer-funded loans to Orbex in January 2025, hailing its plan to launch small satellites into orbit as likely to “transform the UK space industry”.
At the time, Dr Paul Bate, who steps down as director general of the UK Space Agency next month, said Orbex would “inspire a new generation to reach for the stars”.
Last summer, Liz Kendall, the technology secretary, provided an additional £6 million loan to the startup, intended to help it secure a £150 million contract with the European Space Agency to help develop alternatives to Elon Musk’s SpaceX in the United States.
Orbex planned to launch small satellites into orbit using its 19-meter-long low-carbon rockets. It had initially developed its own spaceport on the A’Mhòine peninsula in the Highlands, but was eventually forced to abandon the project and move its planned launches to SaxaVord, a base on the Shetland Islands.
This launch would have been the first from British soil since the failure of British billionaire Richard Branson’s Virgin Orbit mission in 2023.
A government spokesperson said: “We remain committed to supporting our vibrant space sector. We recognize that this will be a very worrying time for Orbex staff. Space launch is a highly competitive sector, and it has always been the case that some companies succeed, while others fail.”
“We will outline more details on our plans to develop key national space capabilities, including launch, in due course. All decisions will be focused on ensuring maximum impact for taxpayer dollars.”
