Space Startup OneWeb Files For Bankruptcy, Blames Coronavirus Outbreak

KEY POINTS

Startup OneWeb files for bankruptcy protection on Saturday
The U.K.-based startup has already launched 74 satellites in space and was in talks with Softbank prior to the coronavirus outbreak of getting a fresh $2 billion capital
OneWeb also laid off most of its staff after initial reports that 10% would only be affected

It looks like the mission for "bringing connectivity to everyone everywhere" ends abruptly for U.K.-based startup OneWeb as it filed for bankruptcy on Saturday.

OneWeb stated on its website that they have filed "for relief under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York" and that the company is also seeking a buyer amid the proceedings. And a large part of their decision to declare bankruptcy is due to the impact the coronavirus has had on their business.

"Our current situation is a consequence of the economic impact of the COVID-19 crisis. We remain convinced of the social and economic value of our mission to connect everyone everywhere," OneWeb chief executive Adrian Steckel said in a statement.

To date, the company has already launched 74 satellites and started the construction of user terminals. There are also about 22 ground stations that the company has completed or at least begun development. OneWeb was able to demonstrate broadband speeds of over 400 Mbps and latency of 32 ms.

And before the coronavirus outbreak, the startup was in talks with the Japanese investment giant Softbank to get a $2 billion boost but couldn't reach an agreement for a potential bridge loan that would allow OneWeb to land new investors, The Financial Times wrote.

OneWeb explained that it has "seen significant early global demand... from governments and leaders in the automotive, maritime, enterprise, and aviation industries." But investors' willingness to fund the company evaporated in the midst of the pandemic.

Apart from filing for bankruptcy protection, OneWeb also laid off most of its staff Saturday. Initial reports stated that only 10% of its workforce would be affected. The only remaining employees are those who continue to operate the existing satellites in space, according to TechCrunch sources.

"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," CEO Adrian Steckel added.