Broadband constellation satellite operator OneWeb will file for bankruptcy protection in the U.S., likely some time Friday, after attempts to secure new funding, including from existing investor SoftBank, fell through, TechCrunch has learned. The Financial Times also reported on the failure of its funding attempt on Friday, based on its own separate sources. The company will be laying off most of its staff, with a team remaining in place to continue to operate its existing satellites in space, according to our sources.
Update: OneWeb confirmed today’s reports in a press release, citing “market turbulence related to the spread of COVID-19” for the failure to raise. “We remain convinced of the social and economic value of our mission to connect everyone everywhere,” said CEO Adrian Steckel.
OneWeb, founded in 2012 as WorldVu Satellites, had been seeking to build out a constellation of broadband internet satellites that would operate in low Earth orbit, providing low-cost connections to customers on the ground with coverage that extends into more remote and hard-to reach areas that are not addressed by current ground-based networks.
Earlier this month, Bloomberg reported that OneWeb had been considering a bankruptcy protection filing, while also weighing other options. One of those other options was a new funding round targeting a raise of around $2 billion. The company had previously raised $3 billion over multiple rounds, including a $1.3 billion and $1.2 billion round in 2019 and 2016 respectively, both of which had SoftBank as lead investor.
OneWeb also just completed a launch earlier in March, bringing the total number of its satellites in orbit to 74. The company then reduced its headcount by as much as 10% through layoffs we reported last week.
This latest step essentially means that OneWeb had exercised all other options for continued cash to stay afloat, and it required considerable reserves in order to continue its planned rapid pace of launches, with the ultimate aim of putting more than 650 satellites in orbit in order to provide its service globally. SoftBank backing away as an investor leaves a big hole that’s difficult to fill in terms of scale and depth of pockets among the rest of the VC field, and the company has been stepping away from a number of its more high-profile investments since encountering difficulties of its own in terms of returning value on the biggest checks its cut, including for WeWork.
OneWeb’s funding situation can’t have been helped by the current global climate, rocked as it has been by the ongoing coronavirus pandemic. Reports suggest that at least some investors are taking a more conservative approach, suggesting that traditional routes to securing more investment may have proven more difficult to unlock than usual.