WASHINGTON — Satellite internet startup OneWeb is expected to file for Chapter 11 bankruptcy as soon as Friday after its largest investor, Softbank, rejected a request for additional funding, according to sources familiar with the situation.
OneWeb’s imminent filing was first reported by The Financial Times.
Softbank, having already invested roughly $2 billion in OneWeb, decided it was the “responsible decision” not to invest further given the startup’s high cash needs, compounded by the global financial instability caused by the coronavirus, one source said.
OneWeb, which has been aiming to launch at least 648 satellites to deliver global broadband connectivity, has 74 satellites in orbit following a March 21 launch that put up 34. The U.K.-based company has raised $3.4 billion, but outside analysts estimated the satellite system would require as much as $7.5 billion to complete.
A bankruptcy filing would add OneWeb to a list of companies that ran out of money trying to launch and operate large numbers of communications satellites in low Earth orbit.
Iridium, Globalstar, Orbcomm and Teledesic all went bankrupt about two decades ago, though only Teledesic failed to emerge from bankruptcy and deploy a second-generation constellation. Filing for Chapter 11 gives companies a chance to emerge from bankruptcy debt free and remain in business.
OneWeb and SoftBank declined to comment.