British Company Seeks New Funding to Pave the Way for Hypersonic Flight
Reaction Engines, a British company at the forefront of developing hypersonic flight technology, is facing a cashflow crunch and is in the process of raising new capital. The Oxfordshire-based company, which boasts big-name backers such as Boeing, Rolls Royce Holdings, and BAE Systems, has appointed advisory firm Silverpeak to assist in securing fresh funding.
According to sources, Reaction Engines is in need of tens of millions of pounds to continue its pioneering work. The company, founded in 1989 and chaired by former defence minister Philip Dunne, specializes in advanced propulsion systems and is currently focused on developing an engine capable of powering aircraft to Mach 25 outside of Earth’s atmosphere.
In an update to investors, seen by Sky News, Mr Dunne acknowledged that the company’s financial performance in the previous year had not met expectations. He also warned that the company would continue to operate at a loss in the current year. “Although the company has a successful track record of raising capital, it is clear that market conditions are tougher than when we last secured new equity in 2022,” he stated.
In 2021, Reaction Engines successfully raised an additional £40 million in equity, bringing the total capital raised from investors to approximately £150 million. Despite being an emerging technology company, Reaction Engines has always prioritized cost management. However, in light of the current funding challenges, the company has taken additional measures to control costs and focus investments on areas that will support near-term revenue generation.
Mr Dunne further explained, “As a result, we were able to keep the loss for 2023 broadly in line with our budget for the year.” However, during the first quarter of this year, it became apparent that there was a mismatch between the company’s resources and its anticipated growth and development of the sales pipeline. As a result, Reaction Engines made the difficult decision to reduce its workforce and simplify its leadership structure.
Despite these challenges, Reaction Engines continues to attract interest and funding from major players in the aerospace industry, highlighting the excitement surrounding its groundbreaking technology. Shareholders in the company also include Schroders, Baillie Gifford Asset Management, and the UAE’s Strategic Development Fund.
When approached for comment, Reaction Engines declined to provide any information regarding its current efforts to secure new funding. However, with the support of its shareholders and the expertise of Silverpeak, the company remains optimistic about its future and its ability to revolutionize the world of aviation.
