A week after launching 34 satellites, space broadband contender OneWeb on Friday filed for Chapter 11 bankruptcy in a New York court after funding talks with its main investor Softbank collapsed due tomarket turbulence.
According to the Financial Times, the company on Friday cut most of its 500 employees after failing to raise as much as $2bn from Softbank for its planned commercial launch in 2021. The talks reportedly broke down hours before it launched 34 satellites from the Baikonur Cosmodrome in Kazakhstan last week.
The UK-headquartered company had planned to launch about 640 satellites for the commercial launch and had raised over $3bn from investors including Softbank, Airbus, and Qualcomm. It also had a joint venture with Airbus to manufacture 900 small satellites at a factory in Florida.
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But with two launches in February, OneWeb only had 74 satellites orbiting earth. It had developed 44 ground stations for a network it claims could potentially deliver speeds in excess of 400Mbps with a latency of 32 milliseconds. It had planned to launch about 30 satellites a month.
The company said it was "close to obtaining financing, but the process did not progress because of the financial impact and market turbulence related to the spread of COVID-19".
It's retained a handful of employees and is negotiating debtor-in-possession financing to continue operating its satellites, which allows it to keep its spectrum license as it attempts to sell the business under the court bankruptcy process. The Financial Times notes that OneWeb's constellation is currently too small to offer telecoms services or generate revenue and the value of its spectrum remains unclear.
"Our current situation is a consequence of the economic impact of the COVID-19 crisis," Adrian Steckel, CEO of OneWeb said in a statement.
"We remain convinced of the social and economic value of our mission to connect everyone everywhere. 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. It is with a very heavy heart that we have been forced to reduce our workforce and enter the Chapter 11 process while the company's remaining employees are focused on responsibly managing our nascent constellation and working with the court and investors."