OneWeb files Chapter 11 after SoftBank stops funding its satellite build-out

OneWeb, the London-based satellite internet startup, filed for Chapter 11 in the Southern District of New York on March 27, 2020. Its press release said it would use the proceedings to 'pursue a sale of its business in order to maximize the value of the company.'

CEO Adrian Steckel said the company had been forced to reduce its workforce and enter Chapter 11. OneWeb laid off about 85% of its 531 employees and blamed the coronavirus pandemic for derailing negotiations for financing that would have funded deployment and commercial launch.

SoftBank, which had already invested roughly $2 billion, decided not to invest further given the startup's high cash needs compounded by COVID-driven market turmoil. OneWeb had launched 74 satellites toward a planned constellation of at least 648.

OneWeb laid off 85% of its 531 employees after SoftBank, which had invested roughly $2 billion, refused to fund more; only 74 of 648 planned satellites had launched.

The business needed billions in capital before generating any revenue.

Dependence on SoftBank left no alternative when it declined to fund more.

COVID-19 froze markets and derailed an advanced financing negotiation.

A capital-intensive business built around one large investor has no plan B when that investor says no: OneWeb needed billions before revenue, and when SoftBank walked away, time ran out.

A consortium of the UK government and India's Bharti Enterprises won the auction for OneWeb in July 2020, investing $1 billion — $500 million each — to take over the bankrupt satellite operator. The business resumed launches under new ownership, but the original shareholders were wiped out.