Forres-based rocket manufacturer Orbex is reportedly on the brink of being acquired by Franco-German aerospace company The Exploration Company, with ongoing negotiations highlighting the critical funding challenges faced by UK space firms. The potential sale follows the UK Government’s decision to withhold a substantial portion of earmarked funding, a move Orbex’s CEO had previously warned could jeopardise the company’s future.
Orbex announced last week that it was in discussions to sell the business, a move confirmed by a company spokesperson who stated that negotiations are “still ongoing” but details remain confidential.
“Our priority at this time is supporting our affected colleagues,” the spokesperson added. “We believe this opportunity plays to the strengths of both businesses and we look forward to sharing more when the time is right.”
The development comes months after it was revealed that nearly £100 million in UK Government funding, initially set aside for Orbex through the European Launcher Challenge (ELC) scheme, remains undistributed.
An European Space Agency document from November 2025 confirmed that €112.3 million (approximately £96 million) of the UK’s €144 million ELC contribution was “still to be distributed.” Consequently, Orbex received only €34.9 million from the ELC, a figure considerably lower than the €169 million reportedly awarded to some European rivals.
This shortfall has been a significant point of contention. In June 2025, Orbex CEO Phil Chambers addressed the House of Commons Treasury Committee, warning that companies like Orbex required “significant government investment” to navigate the “valley of death” between technology development and commercial launch.
Chambers explained the company’s predicament: having developed the necessary technology, it needed to scale up manufacturing and construct a spaceport to launch rockets, yet could not generate turnover without launches, creating a “Catch-22” situation. He advocated for the National Wealth Fund (NWF) to invest in riskier, deep-tech sectors like space.
However, the NWF reportedly rejected Orbex’s plea for investment, deeming it too risky a venture. A spokesman for the NWF stated that it makes “commercial decisions and intend to make a positive financial return for the taxpayer on each transaction we undertake, while ensuring a fair balance of risk and reward with the private sector.”
This contrasts with the Scottish National Investment Bank, which has invested nearly £30 million in Orbex. Highlands and Islands Enterprise has also provided multi-million pound funding for Orbex and its now-mothballed Sutherland Spaceport Project.
The financial strain has led to severe consequences. Orbex’s Danish subsidiary, Orbital Express Launch ApS, has entered bankruptcy, resulting in approximately 90 employee layoffs in January 2026. The subsidiary was reportedly reliant on funding from its parent company. Furthermore, Orbex failed to file its accounts for the last financial year by the December 31, 2025, deadline.
Moray MSP Richard Lochhead lauded Orbex as a “trail blazing space company” and a “rising star of Scotland’s space sector.” He emphasised the importance of funding through the European Space Agency scheme and urged the UK Government to provide “necessary support” for domestic companies to maintain “sovereignty” over satellite and rocket launches, a stance “other countries do for their early stage deep tech companies.”
Despite the funding withdrawal, the UK Government remains a shareholder in Orbex, and any sale agreement will require its approval. A spokesperson for the Department for Science Innovation and Technology affirmed the government’s commitment to “championing our dynamic UK space sector” and “working with multiple partners to ensure funding for space launch companies delivers our requirements for assured access to space, and benefits UK taxpayers.”
The Scottish Government has confirmed it is in discussions with Orbex and the UK Government regarding the company’s status.
