British billionaire Richard Branson's Virgin Galactic will merge with a US investment firm to become the world's first publicly-traded space tourism venture -- with an eye on sending its first clients into space within a year, the group's chief executive said Tuesday.
"By embarking on this new chapter, at this advanced point in Virgin Galactic's development, we can open space to more investors and in doing so, open space to thousands of new astronauts," Branson said in a statement.
Virgin Galactic and Wall Street investment firm Social Capital Hedosophia will merge, with SCH expected to own up to 49 percent of the combined company, the statement said. The total value of the merger is $1.5 billion and the transaction is expected to be complete in the second half of 2019.
SCH founder and chief executive Chamath Palihapitiya, who is investing $100 million of his own money in the merger and is set to be the new partnership's chairman has expressed confidence.
Virgin Galactic "is light years ahead of the competition," said Palihapitiya adding "I cannot wait to take my first trip to space and become an astronaut."
Until now, Virgin Galactic has largely been funded by Branson himself, who launched the company in 2004 and has thus far invested more than $1 billion of his personal fortune.
After years of development, and a fatal accident in 2014 that killed a co-pilot, the company has a viable spacecraft that has twice reached the edge of space. But so far, no paying customers have taken the journey.
"We plan to do that within a year," chief executive George Whitesides told AFP adding that 2,500 people are on the waiting list.
Until then, test flights will continue. The company is also moving into its spaceport in New Mexico, the base for its commercial flights. To date, Virgin has reservations from more than 600 people across 60 countries, earning it about $80 million in paid deposits and $120 million in potential revenues, the group said Tuesday.
Virgin is offering customers just a few minutes in space, six at a time. They will float in the spacecraft's cabin and see the curvature of the Earth under a black sky through huge windows. The spaceship is a cross between a plane and a rocket. It is released at high altitude by a carrier airplane and then ignites its own engine, traveling at three times the speed of sound.
The boundary between the Earth's atmosphere and outer space is set at 50 miles (80 kilometers) by the US military and the space agency NASA, though the international standard is 100 kilometers.
Virgin Galactic is up against Amazon founder Jeff Bezos' Blue Origin and, in a different category, Elon Musk's SpaceX to be the first to send tourists into space.