In a not-so-proud-to-be first for Softbank, one of its star portfolio companies, OneWeb, has filed for Chapter 11 bankruptcy in the US. This will be one of the first for a Softbank-backed startup. For those unaware, OneWeb is a space-tech startup using low earth orbiting satellites for beaming internet down to earth. The company was regularly launching batches of its small internet-beaming satellites, as recent as March 24th.

However, competition from the likes of Elon Musk’s Starlink and a similar attempt by Jeff Bezos-owned Blue Origins has continued to shadow OneWeb’s future prospects. That, despite some hefty fund-raising by the company. OneWeb raised about $3.3 billion in debt and equity financing from shareholders including SoftBank, Airbus SE and Qualcomm Inc. since its inception.

OneWeb was apparently “close to obtaining” even more in external capital, only to be cut short by the ongoing coronavirus outbreak. In a statement released late Friday, the company said, “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.”

OneWeb however, has had rather mixed fortunes when it comes to its operations. While the company did launch 74 odd satellites for powering its commercial internet service, it pales to SpaceX’s 300+ that are already in space. Add to that the aggressive timeline that SpaceX has followed, making it the largest commercial satellite operator globally. And even though OneWeb had half of its 44 ground stations completed or in development, the project was marred with timeline lapses, delaying the imminent launch.

According to disclosures made in the company’s Chapter 11 filing, OneWeb has listed liabilities and assets of more than $1 billion each in its Chapter 11 petition in U.S. Bankruptcy Court in White Plains, New York.

The impact of OneWeb’s bankruptcy filing has weighed in heavily on Softbank as well. The company was trading as low as 10% on opening at the Tokyo Stock Exchange. The stock has recovered some of its losses since then, but still traded 6% lower at the time of writing this article.

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