Virgin Voyages Raises $550M in Additional Capital to Fund Growth
Virgin Voyages, the new cruise brand launched with lead investments from Richard Branson’s Virgin Group and the well-known private investment group Bain Capital, announced that it has completed a significant new round of strategic funding to support its next phase of growth. Schedule to start commercial service just when the world went into the COVID-19 lockdowns, Virgin Voyages has been challenged by timing as it seeks to build a new approach to the cruise industry.
After its launch with a significant investment from Bain Capital, the cruise line reported earlier this year that it was working on a new round of financing. Under the terms of the new round that was completed yesterday, Virgin Voyages closed on $550 million in new capital. The new round again combined some of the best-known companies in the investment industry with Goldman Sachs serving as the lead placement agent while the funding was led by funds and accounts managed by BlackRock. Bain Capital Private Equity and Virgin Group also contributed additional capital for this round as well as continued support from existing lenders.
Announcing the closing, Virgin Voyages said the new funding will enable it to continue the execution of its growth strategy and further strengthen its financial position as cruise demand continues to gain momentum. The company reports that it has seen exponential growth in bookings in the last six months and with the recent end to the CDC’s travel protocols and recovery in other travel sectors, is optimistic that cruising is showing a strong return back toward pre-pandemic levels.
“Despite the unprecedented challenges the cruise sector has faced in the past few years, the industry is exhibiting a powerful rebound,” said Brendan Galloway, Director in BlackRock Global Credit. “We are excited to invest in Virgin Voyages on behalf of our investors as we see a positive outlook and impressive growth on the horizon for the company.”
Virgin Voyages officially launched in August 2021 after having taken delivery on its first cruise ship, Scarlet Lady, in February 2020 from Fincantieri. The planned Caribbean cruising program finally started in October 2021. The company similarly took delivery on its second cruise ship, Valiant Lady, in the summer of 2021 but held the ship’s launch till March 2022.
“Virgin Voyages has successfully launched a new brand in the cruise industry and proven its appeal to both the traditional and non-traditional cruiser, allowing the brand to tap into new markets and re-imagine this travel category,” said Ryan Cotton, a Managing Director at Bain Capital. “The expansion and enthusiastic commitment of the investor group supporting Virgin Voyages is a testament to the attractive fundamentals of this brand and what makes it so special.”
Virgin Voyages had been scheduled to launch its third cruise ship this summer in Greece followed by Australia. In June they announced they were deferring the launch of the third cruise ship, Resilient Lady, until the second quarter of 2023.
Without specifying which cruise line, Fincantieri in its mid-year financial report said that a ship that was initially expected to be delivered in July, was now delayed to the fourth quarter of 2022. Virgin Voyages ordered a total of four cruise ships from Fincantieri, but they have not yet announced the timing and details of the final cruise ship.