OneWeb, a SoftBank-backed competitor of Starlink, is also in the middle of launching its own global satellite constellation. But Bloomberg reported on Thursday that OneWeb is considering filing for bankruptcy, with the report saying the company is facing a cash crunch. OneWeb has raised $3.4 billion to to fund its satellite network, but CEO Adrián Steckel told CNBC in a February interview that the company “is always raising” money.
OneWeb, the satellite internet start-up, is preparing for bankruptcy and to lay off most of its staff, after failing to secure new funding from investors including its biggest backer SoftBank, according to people familiar with the situation.
The company could file for Chapter 11 bankruptcy protection in the US as soon as Friday, according to people involved in the preparations, putting most of its more than 500 employees at risk of losing their jobs.
OneWeb had been in talks with Softbank to raise as much as $2bn in fresh funding before the coronavirus outbreak roiled financial markets, according to people familiar with the discussions.
As markets plunged, OneWeb and SoftBank could not agree terms for a potential bridge loan to give the start-up time to secure new investors. One person close to the discussions said that those talks collapsed on Saturday, just hours before OneWeb launched more than 30 “micro satellites” from the Baikonur Cosmodrome in Kazakhstan to a constellation that it had originally envisaged would total around 640.
The aborted deal with SoftBank comes as the Japanese group is also threatening to pull out of a previously agreed $3bn purchase of stock in WeWork.
OneWeb and SoftBank declined to comment.
Using its low earth orbiting satellites, OneWeb aimed to beam affordable wireless broadband services to anywhere in the world, including remote regions, ships and planes.
It had previously raised $3.4bn from investors including Airbus, Richard Branson’s Virgin Group, Qualcomm, Bharti Enterprises and Grupo Salinas, making it one of the highest-profile casualties of the coronavirus-induced market meltdown among private technology companies.