After a troubled year that saw broadband satellite operator OneWeb file for bankruptcy, get rescue finance from the U.K. government and Bharti, and then emerge out of that with a launch of part of its fleet last month, the London-based company today announced that it’s closed $1.4 billion in funding — money that it says will be enough to (finally) get the rest of its first-generation fleet of 648 satellites off the ground.
The 36 new satellites OneWeb launched in December brought the total number in orbit to 110 satellites. This means there are still more than 500 left to launch in the first generation.
The company is continuing to whittle down its ambitions. Earlier this week, OneWeb announced that it had “streamlined its constellation” and as a result was reducing the request it was making to the U.S. regulators for licenses. Originally OneWeb had applied to the FCC for market access for 47,884 satellites; now the figure is down to 6,372.
SoftBank Group Corp. and Hughes Network Systems are providing the financing, the company said. The news comes about a month after OneWeb launched 36 satellites, its third launch to put more of its fleet into orbit. At the time, its executive chairman Sunil Bharti Mittal said that it was on track to raise $400 million — so this represents a more-than threefold increase on that amount. This appears to confirm that.
“OneWeb’s mission is to connect everyone, everywhere. We have made rapid progress to re-start the business since emerging from Chapter 11 in November,” said Neil Masterson, CEO of OneWeb, in a statement. “We welcome the investments by SoftBank and Hughes as further proof of progress towards delivering our goal.”
A spokesperson for the company has confirmed to me that the company is not disclosing its valuation. Adding in this round, it looks like the company has raised around $4.5 billion to date, although the bankruptcy meant a significant recapitalization and revaluation of the business and that figure includes funding from before it was restructured.
SoftBank and Hughes are both past backers and partners in OneWeb, so this is something of an insurance policy to make sure that its previous investment doesn’t go completely to waste. (At least some of it has already been written down: SoftBank years ago posted an eye-watering loss of $24 billion due in part to that OneWeb bet.)
SoftBank expects $24 billion in losses from Vision Fund, WeWork and OneWeb investments
Hughes, meanwhile, invests via its parent company EchoStar and inked a deal with the company way back in 2017 to build the terrestrial infrastructure that would work with OneWeb’s satellites. Deals, building and rollouts in the world of satellite technology play out over a number of years, and often face delays, so being three years out — or even more — on seeing any fruits from that deal is not hugely surprising.
OneWeb acknowledged the long-time connection between the investors and confirmed that the ground network is still being built by Hughes.
“We are delighted to welcome the investment from SoftBank and Hughes. Both are deeply familiar with our business, share our vision for the future, and their commitment allows us to capitalise on the significant growth opportunity ahead for OneWeb,” said Mittal in a statement. “We gain from their experience and capabilities, as we deliver a unique LEO network for the world.”
Originally, Hughes had planned for the first services to start running in 2019 — although that was when OneWeb and its fleet of LEO (low Earth orbit) satellites was still a very shiny idea, backed by $1.7 billion in venture funding.
The company’s original idea was always great but (no pun intended) also something of a moonshot: LEO satellites have already been proven to be a strong and useful complement to terrestrial networks for providing broadband connectivity to more remote areas that couldn’t be reached in other ways. The idea with OneWeb was to make that service something useful and used by a much bigger group of on-the-ground users, with the promise being 400Mbps for everyone.
While broadband usage has certainly exploded in the interim, what OneWeb perhaps didn’t bank on was that those building non-satellite systems for providing connectivity would also be progressing in their network advances; nor how long it might take, or the financing needed, to get its fleet off the ground on the timelines it was promising.
These days, OneWeb says that growing ubiquity of 5G, Internet of Things and connectivity needs overall still present a strong use case for its approach — which it says “includes a network of global gateway stations and a range of user terminals for different customer markets capable of delivering affordable, fast, high-bandwidth and low-latency communications services.”
Secretary of State, BEIS, The Rt. Hon. Kwasi Kwarteng, said in a statement: “Our investment in OneWeb is part of our continued commitment to the UK’s space sector, putting Britain at the forefront of the latest technological advances. Today’s investment brings the company one step closer to delivering its mission to provide global broadband connectivity for people, businesses and governments, while potentially unlocking new research, development and manufacturing opportunities in the UK.”
OneWeb launches 36 satellites to join its global broadband constellation on orbit
SoftBank is getting a seat on OneWeb’s board with this deal.
“We are excited to support OneWeb as it increases capacity and accelerates towards commercialisation,” said Masayoshi Son, representative director, corporate officer, chairman & CEO of SoftBank, in a statement. “We are thrilled to continue our partnership with Bharti, the UK Government and Hughes to help OneWeb deliver on its mission to transform internet access around the world.”
Pradman Kaul, president of Hughes, added: “OneWeb continues to inspire the industry and attract the best players in the business to come together to bring its LEO constellation to fruition. The investments made today by Hughes and SoftBank will help realise the full potential of OneWeb in connecting enterprise, government and mobility customers, especially with multi-transport services that complement our own geostationary offerings in meeting and accelerating demand for broadband around the world.”
Updated to clarify that the $1.4 billion includes $400 million announced today, plus previous funding.
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