Orbex, a Scottish rocket company aiming to establish the UK’s first sovereign space launch capability, is on the verge of administration. The collapse threatens 150 jobs and casts doubt over Britain’s ambitions in the burgeoning commercial space sector. Despite receiving £26 million in taxpayer loans, the startup has failed to secure further investment, leading to an imminent shutdown.
Funding Failure and Delayed Ambitions
Orbex had planned to launch small satellites from the Shetland Islands as early as 2026, positioning itself as a competitor to companies like SpaceX. Talks with the UK’s National Wealth Fund fell through late last year, leaving the company without crucial capital.
The situation highlights the high financial barriers to entry in the space launch industry. Developing and scaling space rocket technology requires massive investment over extended periods, creating a funding gap that many startups struggle to bridge. Orbex explored mergers with German firm The Exploration Company, but no viable deal materialized.
Government Support and Unfulfilled Promises
The UK government, under both the previous and current administrations, invested heavily in Orbex. Business Secretary Peter Kyle approved £20 million in loans in 2025, touting the project as transformative for the UK space industry. Technology Secretary Liz Kendall later added £6 million to support a £150 million European Space Agency contract aimed at reducing reliance on US-based SpaceX.
The backing was based on the promise of sustainable, low-carbon rockets and a home-grown launch capability. The company initially planned a spaceport in the Scottish Highlands but was forced to relocate to SaxaVord on Shetland.
Broader Implications for UK Space Ambitions
Orbex’s potential failure comes after Richard Branson’s Virgin Orbit crash in 2023, further delaying the UK’s entry into independent space launch. The government acknowledges the high-risk nature of the sector, stating that failures are inevitable.
“Space launch is a highly competitive sector, and it has always been the case that some companies will succeed, while others will fail,” said a government spokesperson.
This collapse raises questions about the effectiveness of current funding models for space startups and whether sufficient institutional support exists to overcome the inherent challenges of the industry. The UK now faces a critical decision on how to proceed with its space launch plans, ensuring that taxpayer money is used effectively to maximize impact in a competitive global market.
The Orbex collapse underscores the financial fragility of early-stage space ventures and the difficulty of competing with established players like SpaceX. The UK’s commitment to space exploration will now be tested by how it responds to this setback and whether it can foster a more sustainable ecosystem for its emerging space industry.
