Satellite broadband company OneWeb runs out of cash, with lead investor SoftBank pulling out amidst financial chaos caused by coronavirus pandemic
Satellite broadband provider OneWeb is to go into administration, after raising $3 billion (£2.4bn) in venture funding and putting 74 satellites into orbit.
The company made the decision to file for bankruptcy protection in the United States at the end of last week after running out of cash and failing to secure additional funding.
Lead investor Softbank, which had led two previous funding rounds in 2016 and 2019, had backed away from funding talks with OneWeb, the Financial Times and others reported, leaving the start-up with few options.
OneWeb had been looking for up to $2bn in new funding and was reportedly in discussions with SoftBank for a potential bridge loan.
Those talks collapsed on Saturday, 21 March, hours before OneWeb proceeded with the launch of 30 new broadband satellites from the Baikonur Cosmodrome in Kazakhstan on Sunday, 22 March.
The launch took OneWeb’s fleet up to a total of 74 out of a total planned at around 640.
Earlier this month Bloomberg reported that OneWeb had been considering filing for bankruptcy protection, while also weighing other options including a new funding round.
The potential $2bn round followed rounds of $1.3bn and $1.2bn in 2019 and 2016 respectively.
Following a satellite launch earlier this month, the company then reportedly reduced its headcount by up to 10 percent.
OneWeb employs more than 500 staff, and it is now reportedly looking at reducing that figure to only a few dozen, who are to be kept on to manage the firm’s existing satellites.
That move would allow OneWeb to maintain its spectrum licence as it considers its options.
The start-up would have required a massive influx of capital to continue its pace of satellite launches, while the current fleet is insufficient for providing services or generating revenues.
SoftBank itself has been grappling with the financial fallout of the coronavirus pandemic, and has been reconsidering its backing of companies such as WeWork.