Despite previous backing from the UK Space Agency, the Scottish National Investment Bank, and various venture capital firms, the company was unable to bridge the “scale-up” funding gap inherent in the capital-intensive aerospace sector.

While the business continues to trade in the short term, the move provides legal protection as leadership explores a potential sale of its assets to secure the best outcome for creditors and its workforce of over 150 employees.

The collapse comes at a critical juncture, as Orbex was preparing for the inaugural test flights of its Prime microlauncher later this year.

Phil Chambers, CEO of Orbex, said: “Disappointing doesn’t come close to describing how we feel about this moment. We have been successfully developing a sustainable, world-class sovereign space launch capability for the UK and were on the cusp of our first test flights later this year. 

“It is no secret that designing and building space rockets to enable a launch service is a capital-intensive, highly advanced process with a long development cycle that creates a ‘scale-up’ funding gap. Institutional support is a crucial to bridge this gap and we have worked tirelessly to try to find both funding or rescue solutions.

“What is most disappointing is that we have brought hundreds of skilled jobs to Scotland; we have been at the vanguard of the UK’s space ambitions; we have led the way in driving good news about the UK’s space sector.”

Mr Chambers highlighted the risk of undoing years of progress in Scotland’s high-tech sector, though a potential lifeline has emerged from Glasgow-based Skyrora. The rival firm has expressed interest in a £10 million asset acquisition that could include the Sutherland Spaceport, subject to due diligence.

Scottish Government officials and regional development agencies have described the news as a significant blow to the Highland economy and the broader UK space industry. Deputy First Minister Kate Forbes and Highlands and Islands Enterprise both reaffirmed their commitment to the sector, suggesting that the region remains attractive to future investors despite this setback.