Lauda wants to be a space pilot
Branson, whose Virgin Group sponsors the Brawn GP team, held a news conference at the Bahrain Grand Prix to publicize his space venture.
He said Brawn's Brazilian driver Rubens Barrichello had also bought a passenger "ticket to space" for the same amount as Austrian Lauda.
"We are not doing upgrades in the space project, we need people who are willing to help fund what is quite an expensive program and these two have been generous enough to pay their way," said Branson. "They can afford it."
The 60-year-old Lauda is a qualified airline pilot who retired from racing in 1985 to concentrate on his own aviation business. His current budget airline Niki competes against his former company Lauda Air.
"I fly Boeing and Airbuses and my only dream…was to fly the space shuttle," said Lauda, hobbling around the paddock on crutches after a recent operation. "I was always looking at that, but that was impossible.
"When Richard came along with this project I was the first knocking on the door."
The U.S.-based Virgin Galactic is one of several contenders in the new commercial space race. The company plans to launch spaceships from carrier planes, taking two pilots and six passengers on a brief sub-orbital journey.
Branson said Virgin were planning to build a "spaceport" in the Middle East as well as in the United States.
"We are in discussions with Bahrain, with Qatar, Abu Dhabi, Dubai and Saudi Arabia and over the next two months we will settle on one of those five countries," he said.
"The idea is that Virgin Galactic will have three spaceports, one in America in New Mexico, one in the Middle Eastern region and one in Australasia."
Branson said the first spaceship would be completed by the end of the year before undergoing 18 months of testing. He and his family will embark on the first flight.
"Niki, when he is finished, will be capable of flying both (mothership and spaceship), " he added. Reuters