London-based satellite communications firm OneWeb has filed for Chapter 11 bankruptcy in New York, less than two weeks after launching 34 satellites.
Founded in 2012, the company was aiming to establish global connectivity at speeds of 500mb/s with a latency under 50ms using a constellation of 650 satellites operating in a low-earth orbit. So far it has launched 74 out of the proposed 650 satellites.
Just nine days before filing for bankruptcy it undertook its second launch of 2020, blasting 34 satellites into low-orbit. It claims to have half of its 44 ground stations “completed or in development”, and has demonstrated connectivity of 400 Mbps and latency of 32 ms from its existing space infrastructure.
Yet iIn a release March 27 OpenWeb said it had failed to secure vital finance.
The company said: “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. 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.”
This may not be the end of the road for OneWeb’s project: Chapter 11 bankruptcy essentially allows companies to reorganise debts in an attempted to stay afloat.
According to its court filings OneWeb has roughly £1.6 billion ($2.1) in total liabilities with a range of creditors such as launch service provider Arianespace. In those filings it is revealed that the firm also owes chipmaker Qualcomm £6.4 million.
Following OneWeb’s public announcement that it was filing for bankruptcy one of its largest investors the SoftBank Group Corp saw its share value take a 10 percent dive. A host of companies have invested in the satellite enterprise, from Coca-Cola, Virgin Group to Airbus and Qualcomm.
In 2016 the firm raised $1.2 billion (£9.6) in investment during a SoftBank led fundraising round that sought to build a high volume production facility in Florida. That site now employees more than 250 workers, the fate of that facility is now unknown, but they have started to let staff go.
This hurts. I was at #OneWeb since day one and put my blood, sweat, and tears into the mission along with everyone else who believed in it. To see it end like this is heartbreaking… My sincere condolences to the team there. Any company would be lucky to pick up that talent!
— Mike Lindsay (@mikeclindsay) March 28, 2020
The UK tax payer is also getting burnt in the collapse of OneWeb as the UK Space Agency last year contributed £18 million towards the project through the European Space Agency’s telecommunications research programme (ARTES).
Around the time of that investment then Science Minister Chris Skidmore commented on a visit to an ESA station in the Netherlands: “The commercial potential for a cost effective worldwide telecoms satellite system is huge, and the UK space sector is playing a leading role in delivering it.
“It is made possible by our ongoing commitment to the European Space Agency and our world-leading capabilities in space and telecommunications.”