Credit & Capital

SoftBank-Backed Satellite Startup Files for Bankruptcy

OneWeb said it couldn’t obtain new funding from investors due to the financial impact of the COVID-19 pandemic.
Lauren MuskettMarch 30, 2020
SoftBank-Backed Satellite Startup Files for Bankruptcy

Satellite internet startup OneWeb filed for bankruptcy and reduced its workforce after it couldn’t obtain new funding from investors due to the financial impact of the COVID-19 pandemic.

Before the pandemic, the company was in talks with SoftBank, its biggest backer, about possibly raising another $2 billion in a funding round. SoftBank Group fell as much as 10% after the company filed for bankruptcy.

“Since the beginning of the year, OneWeb had been engaged in advanced negotiations regarding investment that would fully fund the company through its deployment and commercial launch,” said the company in a statement. “While the company was close to obtaining financing, the process did not progress because of the financial impact and market turbulence related to the spread of COVID-19.”

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The U.K.-based company previously raised $3.4 billion from investors, including Qualcomm, Airbus, and Virgin Group.

OneWeb wanted to beam affordable broadband internet from space for access everywhere, including remote locations. The company just launched new satellites on March 21, bringing its constellation to 74 satellites. Outside analysts estimated the company’s anticipated 648 satellite system would require up to $7. 5 billion to complete.

“We remain convinced of the social and economic value of our mission to connect everyone everywhere,” said OneWeb’s CEO Adrian Steckel. “Today is a difficult day for us at OneWeb. Our hope is that this process will allow us to carve a path forward that leads to the completion of our mission, building on the years of effort and the billions of invested capital.”

OneWeb filed for Chapter 11 protection in U.S. Bankruptcy Court for the Southern District of New York. The company said it plans to “pursue a sale of its business in order to maximize the value of the company.”

The startup said it laid off about 85% of its 531 employees before filing for bankruptcy. Remaining employees will be focused on managing the company’s constellation and working with the courts and investors.

Sarah L. Voisin/The Washington Post via Getty Images