- OneWeb collapses after as it couldn’t secure new investment from Softbank
- The company blames the ongoing coronavirus crisis for failing to find investors
- OneWeb has been working on a project that was supposed to provide high-bandwidth internet connection to anywhere in the world, excluding Antarctica
OneWeb has declared bankruptcy and laid off most of its staff yesterday as it couldn’t secure new investments, including from its major investor SoftBank (TYO:9984).
The satellite internet company has been working on a network to deliver worldwide broadband and it blamed the ongoing coronavirus crisis for failing to secure new funding.
“Our current situation is a consequence of the economic impact of the Covid-19 crisis. We remain convinced of the social and economic value of our mission to connect everyone everywhere,” said Chief Executive of OneWeb, Adrian Steckel said in a statement.
Not long ago, OneWeb launched the 74th satellite in a constellation planned to total a minimum of 648 spaceships. The new network project was supposed to deliver high-bandwidth, low-latency internet connections to anywhere in the world, except Antarctica.
Before the pandemic disturbed the financial markets, the satellite internet startup held discussions with SoftBank to secure $2 billion in fresh funding.
As markets suffered a blow, the two companies could not reach an agreement over a potential bridge loan to give OneWeb time to find new investors. The discussions failed last Saturday, a few hours before OneWeb put over 30 “microsatellites” to the constellation,
The collapse in discussions with SoftBank comes as the Japanese conglomerate could also give up on the previously agreed $3 billion acquisition of stock in WeWork.
“Today is a difficult day for us at OneWeb. So many people have dedicated so much energy, effort, and passion to this company and our mission. 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,” added OneWeb boss Adrian Steckel.
In case OneWeb fails to find new investors, the British government will take responsibility for the 74 spacecraft in orbit and will be responsible if the satellites collide.
Early OneWeb investors include Airbus, Intelsat, Bharti Enterprises, Coca Cola, Group Salinas, Hughes Network Systems, Virgin Group and the major supporter Softbank.